AGL 40.00 Decreased By ▼ -0.03 (-0.07%)
AIRLINK 128.25 Increased By ▲ 0.55 (0.43%)
BOP 6.75 Increased By ▲ 0.14 (2.12%)
CNERGY 4.54 Decreased By ▼ -0.06 (-1.3%)
DCL 9.23 Increased By ▲ 0.44 (5.01%)
DFML 41.58 No Change ▼ 0.00 (0%)
DGKC 87.05 Increased By ▲ 1.26 (1.47%)
FCCL 32.58 Increased By ▲ 0.09 (0.28%)
FFBL 64.59 Increased By ▲ 0.56 (0.87%)
FFL 11.61 Increased By ▲ 1.06 (10.05%)
HUBC 111.52 Increased By ▲ 0.75 (0.68%)
HUMNL 14.97 Decreased By ▼ -0.10 (-0.66%)
KEL 5.03 Increased By ▲ 0.15 (3.07%)
KOSM 7.33 Decreased By ▼ -0.12 (-1.61%)
MLCF 40.90 Increased By ▲ 0.38 (0.94%)
NBP 61.50 Increased By ▲ 0.45 (0.74%)
OGDC 195.60 Increased By ▲ 0.73 (0.37%)
PAEL 27.51 No Change ▼ 0.00 (0%)
PIBTL 7.70 Decreased By ▼ -0.11 (-1.41%)
PPL 152.80 Increased By ▲ 0.27 (0.18%)
PRL 26.83 Increased By ▲ 0.25 (0.94%)
PTC 16.20 Decreased By ▼ -0.06 (-0.37%)
SEARL 83.50 Decreased By ▼ -0.64 (-0.76%)
TELE 7.85 Decreased By ▼ -0.11 (-1.38%)
TOMCL 36.40 Decreased By ▼ -0.20 (-0.55%)
TPLP 8.96 Increased By ▲ 0.30 (3.46%)
TREET 17.00 Decreased By ▼ -0.66 (-3.74%)
TRG 58.50 Decreased By ▼ -0.12 (-0.2%)
UNITY 27.30 Increased By ▲ 0.44 (1.64%)
WTL 1.33 Decreased By ▼ -0.05 (-3.62%)
BR100 10,000 No Change 0 (0%)
BR30 31,002 No Change 0 (0%)
KSE100 94,960 Increased By 768 (0.82%)
KSE30 29,500 Increased By 298.4 (1.02%)

The proposed Deposit Protection Corporation would be exempted from payment of Super Tax applicable at the rate of 4 percent for banking companies and at a rate of 3 percent for persons other than banking companies under the Deposit Protection Corporation (DPC) Bill 2016. It is learnt that the section 31 of the DPC Bill 2016 has proposed a provision relating to the exemption from taxes.
According to the proposed section, 'Notwithstanding anything contained in the Wealth Tax Act, 1963 (XV of 1963), the Income Tax Ordinance, 2001 (XLIX of 2001). The Stamp Act 1899 (II of 1899) or any other law for the time being in force relating to wealth tax, income tax, super tax or any other tax, the Corporation shall not be liable to pay any wealth tax, income tax or super tax', it added.
Deposit Protection Corporation (DPC) Bill 2016 has been submitted in the Senate for establishing the Deposit Protection Corporation by introducing deposit insurance scheme which is an integral safety-net to ensure the soundness of the banking system and protect small depositors of a bank in case of its failure.
Under the proposed Act, Deputy Governor State Bank of Pakistan would head the proposed Deposit Protection Corporation (DPC). The purpose of the subject draft Act is to establish the Deposit Protection Corporation (DPC) for instituting an explicit deposit insurance scheme in Pakistan. Under the proposed Act, the corporation shall guarantee the full payment of funds held in depositor's accounts with a member institution, regardless of the number and size of the deposits, up to an amount prescribed by the Corporation from time to time.
The above amount shall be inclusive of any interest accrued or returned as at the date of the notification of the State Bank under terms and procedures for reimbursement of protected deposits. Details of the proposed law revealed that the banking system in Pakistan has become increasingly private sector-owned through the privatisation of the once dominant state-owned banks and the entry of new banks. Consequently, the share of public sector banks has dropped from 92 percent in 1990 to around 19 percent in March 2015.
However, the legal framework originally promulgated for nationalised banks has not kept pace with these developments. In order to protect small depositors, it is proposed to introduce an explicit depositor insurance scheme through DPC which will compensate depositors up to a prescribed limited amount in case of a bank's failure. The DPC will be a fully owned subsidiary of the State Rank which has the statutory responsibility to ensure the soundness of the banking system. This arrangement will yield maximum synergy and cost-saving due to close co-ordination of the DPC with the State Bank's supervisory functions and resources. This Bill is designed to achieve the aforesaid purpose.

Copyright Business Recorder, 2016

Comments

Comments are closed.