KARACHI: Some 98 percent of total depositors of banking sector are eligible for their deposit’s protection in case of their bank’s failure under the Deposit Protection Corporation’s protection scheme.
According to second Annual Report issued by DPC, a subsidiary of State Bank of Pakistan (SBP), as on June 30, 2022, the total number of bank depositors falls under Deposit Protection Corporation’s protection scheme goes beyond 98 percent at the end of FY22 and out of these approximately 95 percent of the depositors are now fully protected.
End of the last fiscal year, 98.9 percent of total depositors of conventional banking and 98.7 percent of Islamic banking depositors are eligible for their deposit’s protection in case of their bank’s failure. This high scope of coverage signifies the effectiveness of the protection offered by DPC.
Eligible Deposits of DPC Member banks continued to reflect increasing trend in line with the rise in total deposits. The Total Deposits showed a YoY growth of 15.2 percent and stood around Rs 22.8 trillion as on June 30, 2022, while the Eligible Deposits grew by 11.4 percent during the same period to reach Rs 12.2 trillion as on June 30, 2022.
20 applications received for digital banking licence: SBP
The deposits growth can be attributed to factors such as expansion in branch network, higher home remittances, inflows from Roshan Digital Account (RDA) and higher rate of return. During FY 2021-22, sharp decline in Covid cases also led towards normalcy in business routines and supported the growth in deposits.
In our efforts to provide a reasonable coverage to a large majority of depositors, the Corporation has revised the coverage limit and enhanced it from PKR 250,000 to PKR 500,000 in Year 2021-22. This enhanced coverage translates into nearly 1.7 times of GDP per capita income in Pakistan as of June’22 which was at 2.22 times as of June’21 and was higher than that of many other jurisdictions in Asia-Pacific and other regions around the globe.
On YoY basis, the growth in premium collection from IBIs remained 15 percent, 21.7 percent and 28.4 percent during last three years as compared to the growth in conventional banks premium that remained at 9.5 percent, 13.5 percent and 12.6 percent for the same periods.
Copyright Business Recorder, 2022