Deposit Protection Fund Crosses Rs. 77 Billion
The Deposit Protection Fund (DPF), maintained with regular contributions from the member banks, has surpassed Rs. 77 billion (approximately $340 Million) as of October 2022. It would continue to build its funds up to a credible level that can adequately ensure effective compensation to eligible depositors and fulfillment of potential role in the resolution of distressed banks.
The total deposits of DPC Member banks showed a YoY growth of 15.2 percent and stood around Rs. 22.8 trillion as on June 30, 2022. DPC provides coverage of up to Rs. 500,000 per depositor-per bank for the domestic operations of member banks.
The deposit growth can be attributed to factors such as expansion in the branch network, higher home remittances, inflows from the Roshan Digital Account (RDA), and a higher rate of return. During FY2021-22, a sharp decline in COVID cases also led towards normalcy in business routines.
The premium charged to banks by DPC is linked to their total eligible deposits, thus the increase in premium collected directly corresponds to growth in such deposits of the member banks. However, as the pace of growth in Islamic Banking is higher than that of conventional banking, IBIs’ premium collection has recorded a higher corresponding increase than premium collection from conventional banks.
Growth in premium collection from IBIs remained at 15.0 percent, 21.7 percent, and 28.4 percent during the last three years. Growth of deposits in Islamic Banking is greater than that of conventional banking. The total number of depositors that falls under DPC’s protection scheme goes beyond 98 percent.
The report highlights the Corporation’s milestones and provides statistics on important factors like total and eligible deposits, coverage ratio, premium received, and growth in deposits.