BB drafts law bringing NBFI depositors, like bank, under insurance scheme

Staff Correspondent | Published: 00:05, Feb 14,2018 | Updated: 00:02, Feb 14,2018

 
 

A file photo shows Bangladesh Bank headquarters in Dhaka. Bangladesh Bank has framed a draft of ‘Deposit Protection Act 2017’ bringing non-bank financial institutions, like the banks, under the deposit insurance scheme to protect the interest of depositors. — New Age photo

Bangladesh Bank has framed a draft of ‘Deposit Protection Act 2017’ bringing non-bank financial institutions, like the banks, under the deposit insurance scheme to protect the interest of depositors.
The proposed act will replace the existing ‘Bank Deposit Insurance Act 2000’ under which only bank depositors get insurance coverage of their deposit in case of a scheduled bank goes into liquidation.
Deposits in both banks and NBFIs will come under protection scheme if the proposed law finally gets nod of the parliament and the president.
Like banks, NBFIs will also face a ban on collection of deposits for a time being for failure of depositing premium on deposits of a client, according to the draft.
The central bank will ask a bank or NBFI to refrain from collecting deposit for a certain time if the bank or NBFI fails to deposit the premium successive two times.
BB will also take steps to wind up a bank or NBFIs as per recommendation of the trustee board if the bank or NBFI fails to deposit the premium two or more times in a row.
According to the law, banks and NBFIs will have to bring the deposits of their clients under insurance coverage with the Deposit Protection Trust Fund of the central bank.
The BB, however, will determine the portion of deposits for the insurance coverage and the rate of premium through official gazette in time to time.
Like the existing act, a depositor will get up to Tk 1 lakh from the fund under the proposed law if a bank or NBFIs go into liquidation.
Officials of the central bank said that the draft would be finalised after incorporating feedback of stakeholders and then sent to the finance ministry for taking next steps including approval of the cabinet and then parliament.
Currently, there are 57 scheduled banks and 34 NBFIs operating in the country.
The amount of deposit reached Tk 9,26,179 in banks and Tk 41,885 crore in NBFIs till December.
On the other hand, the size of deposit insurance trust fund stood at Tk 6,010 crore up to June 2017.
Currently, banks have to pay premium at the rate ranging from 0.08 to 0.10 per cent on the portion of deposits which come under insurance.
The new draft, however, does not fix any rate of premium saying that the central bank will announce the rate time to time. 

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