KARACHI: The State Bank of Pakistan (SBP) on Friday announced that the Deposit Protection Corporation (DPC) has increased the guaranteed amount for all eligible depositors of banks from Rs250,000 to Rs500,000.

       An amount up to Rs500,000 per depositor per bank has been determined by the Corporation to be the guaranteed amount. The guaranteed amount may also be referred to as the protected amount or protected deposit.

       “This enhanced guarantee amount now provides full protection up to 95pc of the eligible depositors. The main objective of the deposit protection scheme is to safeguard depositors’ interest and further enhance their trust banking sector.”

       Membership of the Deposit Protection Corporation is compulsory for all banks scheduled under sub-section (2) of section 37 of the State Bank of Pakistan Act 1956.

       The protected accounts are all types of current and saving accounts; all types of branchless banking accounts; fixed term deposits or accounts; call deposit receipts or security deposit receipts and deposit balances kept as cash margins or cash collateral or under lien, that are payable to protected depositors after satisfaction of all dues payable by them to the bank.

       Further, the foreign currency denominated depositors will be paid the rupee equivalent of the protected amount at the exchange rate declared by the State Bank of Pakistan on the day of the notification.

       “Deposit protection facility is applicable to all the eligible depositors and does not require any further subscription or registration of depositors,” said the SBP.

       “The guarantee amount or protected deposit becomes payable to eligible depo--sitors only if State Bank declares a bank as a failed bank and is not payable under any other circumstances,” said the SBP.

       Published in Dawn, September 25th, 2021