The Deposit Protection Corporation (DPC) announced Tuesday an increase in the guarantee amount for eligible depositors of its member banks from Rs500,000 to Rs1 million.
This enhancement, approved by the DPC's board, is set to provide full protection to approximately 96% of the eligible depositors across the nation.
The State Bank of Pakistan (SBP) stated that this decision is aimed at safeguarding depositors' interests and promoting financial stability within the country.
With this revised guarantee, the DPC now covers a staggering 77.7 million accounts held by member banks, contributing to the protection of nearly 96% of the total account holders in the banking sector, which amounts to about 80 million individuals.
Previously, the DPC's guarantee was limited to Rs500,000, a threshold that many experts believed was inadequate in protecting depositors, especially in times of economic uncertainty.
The decision to increase the limit comes at a crucial juncture, as it is expected to enhance depositor confidence and encourage more individuals to engage with the banking system.
Importantly, the deposit protection facility is available to all eligible depositors at no additional cost, ensuring that access to this safety net is seamless and straightforward.
However, the guarantee will only be activated if the SBP declares a bank as a failed institution, highlighting the importance of maintaining a sound banking environment.
