Bangladesh Bank Proposes New Deposit Protection Ordinance with Increased Payout Limit
The Bangladesh Bank (BB) has introduced a draft of the Deposit Protection Ordinance, proposing an enhanced payout limit of Tk 2 lakh per depositor in the event of a bank’s liquidation. This new regulation, which is currently open for public feedback, aims to strengthen depositor security and will be reviewed every three years to ensure its effectiveness.
Establishment of Deposit Protection Authority
The ordinance outlines the formation of a Deposit Protection Authority (DPA) within the central bank, which will oversee a dedicated Deposit Protection Fund. This fund will be maintained through premiums collected from financial institutions and managed separately from the Bangladesh Bank’s other responsibilities.
Depositors whose balances exceed the coverage limit will need to claim the excess through the appointed liquidator. The ordinance also mandates that secured deposits be reimbursed within seven days of a bank’s dissolution, ensuring prompt financial relief for affected depositors.
Governance and Operational Framework
The Deposit Protection Division will be created within the central bank to handle the administration of the protection system. A seven-member board of directors, chaired by the BB governor, will oversee critical decisions, including the maximum coverage limit, risk-based premium rates, and fund allocations for bank resolutions.
Under the proposed system, the deposit protection fund will be financed by:
- Initial, annual risk-based, and special premiums collected from banks.
- Penalties imposed on institutions failing to pay premiums on time.
- Investment earnings from the fund.
- Adjusted funds from liquidated banks.
- Other designated financial sources.
If the fund faces a shortfall, the BB will be authorized to impose special premiums, seek government support, or secure government-backed loans.
Tax Exemptions and Penalties for Non-Compliance
To enhance financial sustainability, the draft ordinance exempts the deposit protection fund from taxation under the Income Tax Act, 2023, the Business Profits Act, 1947, and other applicable tax laws. Additionally, banks that fail to remit their required premiums on time will face penalties, including direct deductions from their current accounts and interest charges based on Bangladesh Government Treasury Bond or Treasury Bill rates.
A Step Forward in Depositor Protection
The introduction of this ordinance marks a significant improvement from the Bank Deposit Insurance Act-2000, which currently caps payouts at Tk 1 lakh. Central bank Governor Ahsan H Mansur previously hinted at the need for a stronger depositor protection framework, emphasizing its role in safeguarding public trust in the banking system.
As Bangladesh continues to modernize its financial regulations, this ordinance represents a proactive measure to enhance banking stability and ensure depositor confidence amid an evolving economic landscape.
No deposit, no worries – a Secure and Reliable Gaming Experience
In an era of evolving financial security, it’s crucial to choose a trusted platform for your investments and entertainment. JDB777.com offers a secure and reliable gaming experience, ensuring fairness and transparency while providing exciting opportunities for players. Most importantly, there’s no deposit required! With cutting-edge technology and user-focused services, JDB777.com is the ultimate destination for online gaming enthusiasts. Visit JDB777.com today and experience the next level of entertainment!