‘Insurance covers Tk1 lakh, rest of deposit to come from liquidator’

Don’t be concerned about getting your money back although it may take some time, says central bank spokesperson Serajul Islam

In case of any bank’s liquidation, depositors will get up to Tk1 lakh as insurance coverage within 180 days while the rest of the deposit will be returned by the liquidator as per relevant laws, said the central bank.

“So, don’t be concerned about getting your money back although it may take some time,” Serajul Islam, executive director and spokesman of the Bangladesh Bank, on Wednesday told reporters at a press conference at the central bank headquarters in Dhaka.

The regulator appoints a liquidator to calculate assets and liabilities of a bank after its liquidation. So, it needs time to finalise the entire process, he explained.

Now, the size of the deposit insurance trust fund is Tk8,747 crore. Every bank provides a certain amount of insurance premium to the Deposit Insurance Department of the Bangladesh Bank.

On the basis of a bank’s health, the amount of insurance premium is 8 to 10 paisa for every Tk100 deposit. The Bangladesh Bank has not yet decided to increase the premium, said AFM Shahinul Islam, general manager of the Deposit Insurance Department.

Meanwhile, the central bank also proposed to bring the non-bank financial institutions, alongside banks, under the deposit insurance scheme and increase the amount of coverage.

In this regard, a draft law bringing amendments to an existing one is now with the finance ministry for its final approval, according to the Bangladesh Bank.

“If the amount of insurance coverage doubles, 96 percent depositors will come under the insurance umbrella,” said Serajul Islam.

Presently, 92 percent depositors are under the insurance coverage.

The proposed Deposit Protection Act 2020 offers to empower the Trustee Board and the Bangladesh Bank to increase the insurance amount or fix it from time to time.

Alongside the Banking Company Act, the Deposit Insurance Act is a separate security measure that ensures safety of deposits.