Bangladesh Bank
What is DIS?
Deposit Insurance Systems is an institutional initiative to protect depositors against the loss of their deposits in the event that a scheduled bank goes into liquidation.
What are the objectives of Deposit Insurance Systems (DIS)?
The important objectives of DIS are:
1. Protect small depositors
2. Enhance public confidence
3. Enhance stability of the financial system
4. Increase savings and encourage economic growth
5. Enhancing more propitious bank services
When DIS was introduced in Bangladesh?
In Bangladesh Deposit Insurance was introduced in August, 1984.
Which banks are insured by the DIS?
All scheduled banks/commercial banks including the branches of foreign banks functioning in Bangladesh are insured by the DIS.
What does the DIS insure?
The DIS insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits:
1. Deposits of foreign Governments
2. Inter-bank deposits
3. Deposit from the Government of Peoples Republic of Bangladesh
4. Any amount due on account depositors
5. Any amount, which has been specifically exempted by the DIS with the previous approval of Bangladesh bank
By Which law/Act the DIS is operated?
"Bank Amanat Bima Ain 2000 (The Bank Deposit Insurance Act, 2000)".
What is the basis of determining the premium of DIS?
As per "Bank Amanat Bima Ain 2000 (The Bank Deposit Insurance Act, 2000)", premium is determined on a half yearly basis, i.e. January-June and July-December sessions.
How does the Premium determined for the banks?
On the basis of Financial Health/CAMELS rating of the banks, the premium rate is determined in accordance with three categories, namely a) 0.10% for Problem banks & b) 0.09% for Early Warning Banks & c) 0.08% for Other than problems and Early Warning Banks.
What is meant by Deposit Insurance Trust Fund (DITF?
In accordance with the provision of the "Bank Amanat Bima Ain 2000 (The Bank Deposit Insurance Act, 2000)", premium collected from insured banks and all other receivables are deposited into an account called Deposit Insurance Trust Fund (DITF).
Who is the Chairman of the Trustee Board?
The Governor of Bangladesh Bank who is the Chairman of the Board of Directors of Bangladesh Bank is also the Chairman of the Trustee Board.
How many members are in the Trustee Board?
All the members of the Board of Directors of Bangladesh Bank are the members of the Trustee Board. At present 9 (nine) members are in the trustee Board.
How the DITF (Deposit Insurance Trust Fund) is utilized?
As per the existing decision of the Trustee Board, the DITF is invested in the Government Treasury Bond/bill and the Income derived from such investment is also credited to the DITF Account. At present fund is invested only in 5 years and 10 years Bangladesh Govt. Treasury Bond (BGTB).
Who are authorized to invest/manage the DITF fund?
Trustee Board of DITF is responsible for managing DITF. The Deposit Insurance Department (DID) of Bangladesh Bank is entrusted with the responsibilities of managing the fund.
What is the maximum deposit amount insured by the DIS?
Each depositor in a bank is insured up to a maximum of BDT One hundred thousand for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank's license or the date on which the scheme of amalgamation/merger/reconstruction comes into force.
What is the ceiling on amount of Insured deposits kept by one person in different branches of a bank?
If a person keeps deposits in different branches of a bank, all the account will be aggregated for the purpose of insurance cover and the ceiling amount will be maximum BDT One hundred thousand.
Are deposits in different Banks separately insured?
Who pays the cost of Deposit Insurance?
The Insured Banks entirely pay the cost of Deposit Insurance (premium).
Whether the Principle and accrued interest of an account are insured?
Yes, but the aggregate insured amount will not be BDT One hundred thousand.
Can the bank deduct the amount of dues payable by the depositor?
Yes. Banks have the right to set off their dues from the amount of deposits. The deposit insurance is available after netting of such dues.
When is the DITF liable to pay?
If a bank goes into liquidation: The DITF is liable to pay to each depositor through the liquidator, the amount of his deposit up to BDT One hundred thousand within 90 days from the date of receipt of claim list from the liquidator.
Does the DITF directly deal with the depositors of failed banks?
No. In the event of a bank's liquidation, the liquidator prepares depositor wise claim list and sends it to the Bangladesh Bank or Trustee Board for scrutiny and payment. The DITF pays the money to the liquidator who is liable to pay to the depositors.
Can any insured bank withdraw from the DITF coverage?
No. All scheduled banks have to maintain Deposit Insurance Systems and no bank can withdraw from it.
How Many institutions are insured?
At present 47 institutions (banks).
What is meant by IADI?
International Association of Deposit Insurers.
When did Bangladesh become the members of IADI?
In the year of 2006.
Other than commercial banks, do any other deposit-taking institutions (co-operative or NBFIs) currently operate?
Not yet.
Is membership in the Deposit Insurance Systems mandatory for all the commercial banks operating in Bangladesh?
In the event of a failure, what is the required time period for deposit insurance reimbursements after liquidation of commercial banks?
Within 180 days (within 90 days of submission claim list by liquidator from the date of his assuming office and within 90 days of reimbursements after getting such claim list).
In the event of a failure, which authority has the power to liquidate the estate and distribute payments to creditors for the Commercial / scheduled Banks?
Bangladesh Bank as a Central Bank of Bangladesh.
In the event of a failure, which authority has the power to cancel the license of banking business?
Bangladesh Bank as the Central Bank of Bangladesh.
Is the number of days mandatory to begin reimbursement?
Is the DITF needed to be audited?
As per article # 9 of "Bank Amanat Bima Ain 2000 (The Bank Deposit Insurance Act, 2000)", it is mandatory to prepare the Annual Audit Report for DITF.
Who can audit the DITF?
The External Auditor appointed by the Governor of Bangladesh Bank as the chairman Trustee Board can audit the DITF.