SBP reveals how much deposits in bank accounts have legal cover

ISLAMABAD: The State Bank of Pakistan (SBP) has revealed how much deposits in accounts of commercial banks have legal protection, ARY News reported on Wednesday.

Briefing the Senate Standing Committee on Finance and Revenue on Deposits Protection Corporation (DPC), SBP Deputy Governor Inayat Hussain said that the funds of depositors had legal protection worth Rs 500,000.

Inayat Hussain warned that if a bank fails, depositors with more than Rs 500,000 in their accounts will not be guaranteed compensation.

SBP deputy governor further said that 94pc of account holders in Pakistan have deposits of less than Rs0.5 million while only 6pc have deposits of more than it.

This means the vast majority of depositors in Pakistan are protected by the Deposits Protection Corporation (DPC). The DPC collects subscription fees from banks every year to fund its operations.

He said that all the scheduled banks operating in the country were required to be members of DPC to ensure the deposits in these banks come under the umbrella of the deposit protection mechanism.

While briefing on the account opening issue faced by the Politically Exposed Persons (PEP), SBP officials informed that a focal person had appointed in each bank to facilitate the PEP in their account opening procedures.

The SBP also appointed a focal person in the SBP to solve the queries related to the account opening said adding that SBP further instructs banks to fast this procedure.

Senator Kamil Ali Agha said that the PEP faced problems in their account opening this is a violation of fundamental human rights and the constitution Article 10.

He said action should be taken against such officers and persons who obstruct the opening of accounts.