Banks legally protect amounts up to Rs0.5mn: SBP

Islamabad: The Deputy Governor State Bank of Pakistan (SBP) Salimullah said that funds up to Rs0.5 million in banks have legal protection.

The Senate Standing Committee on Finance reviewed the Deposit Protection Corporation Amendment Bill 2024 in a meeting chaired by Salim Mandviwala. Deputy Governor SBP Salimullah told the committee that now deposits up to Rs0.5 million in banks will get legal protection. Earlier deposits up to Rs0.25 million were protected.

It is pertinent to note that if a bank goes bankrupt, the deposits of all account holders are not protected. Only funds up to Rs0.5 million in banks are legally protected.

According to officials, the rate of account holders in the country with deposits up to Rs0.5 million is 94 percent. Only six percent of account holders have a bank balance of more than Rs0.5 million.

According to the State Bank, account holders up to Rs0.5 million can be paid through the Deposits Protection Corporation, a subsidiary of the State Bank of Pakistan.