How much amount is legally protected in bank accounts?

ISLAMABAD: The State Bank of Pakistan (SBP) issued an important update regarding the security of bank deposits, ARY News reported.

According to details, Senator Saleem Mandviwala presided over the meeting of the Senate Standing Committee on Finance to review the Bank Deposit Protection Corporation Amendment Bill 2024.

SBP Deputy Governor Saleem Ullah also appeared before the standing committee and briefed it that that under the bill, deposits up to Rs 500,000 will be legally protected, whereas earlier only deposits up to Rs 250,000 were protected.

The SBP deputy governor said that the protection of classified loans of banks is over 100 percent, to which Saleem Mandviwala said that microfinance banks have been included in the law.

The Deputy Governor said that there are some general issues with microfinance banks, and the IMF has set conditions to resolve these issues. He said that they want to include microfinance banks in the deposit protection scheme, just like commercial banks.

Earlier, it was reported that the bank deposits continued to grow and jumped to an all-time high of Rs27.8 trillion by the end of February 2024, according to the annual report of the Deposit Protection Corporation (DPC)

Correspondingly, the volume of eligible deposits for protection under the DPC scheme recorded a net increase of Rs4665 billion in last year (February 23 to February 24).

In February 2024, bank deposits clocked in at Rs27.8 trillion as compared to Rs22.9 trillion in February 23.

According to economic experts, the investors are increasing their deposits in the banks due to high interest rate.