Deposit Protection Ordinance issued to protect depositors interests
According to the new ordinance, the newly licensed banks and finance companies will have to deposit their initial premiums within 30 days of licensing
The government yesterday (23 November) approved the Deposit Protection Ordinance, 2025, aimed at ensuring economic stability and protecting the interests of the depositors in the country.
The advisory council gave the approval to the draft of the ordinance at its meeting at the Chief Adviser's Office (CAO) with Chief Adviser Muhammad Yunus in the chair.
"The new ordinance will be regarded as a landmark law for ensuring financial stability and protecting the interests of depositors," Chief Adviser's Press Secretary Shfiqul Alam said at a briefing at the Foreign Service Academy here this afternoon after the advisory council meeting.
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Under the previous Bank Deposit Insurance Act, 2000, the maximum insured amount for deposits was Tk1,00,000, he said, adding, the new ordinance doubles this limit to TK2,00,000, covering around 93% of all depositors in the country.
Noting that the ordinance comprises six chapters and 33 sections, the press secretary said one of its key features is the establishment of two separate funds - the Bank Company Deposit Protection Fund and the Finance Company Deposit Protection Fund.
"These funds will be neither interchangeable, nor engage in borrowing or lending between them," he said, adding, these funds will remain separate from other Bangladesh Bank funds.
According to the new ordinance, the newly licensed banks and finance companies will have to deposit their initial premiums within 30 days of licensing, while all existing and new finance companies must be included as members by 31 July 2028.
The initial premium rate will be set at a minimum of 0.50% of capital or at a rate determined by the Trustee Board. The ordinance emphasises safe investment, diversification, and liquidity preservation for fund management alongside generating profits.
Shafiqul Alam said the maximum insured amount for each depositor will be Tk200,000 instead of Tk100,000,
Additionally, the Trustee Board will have the authority to recommend revisions to the maximum limit every three years, he added.
According to the ordinance, the time frame for settlement of insured deposit claims will be reduced from 180 working days to 17 working days.
"Along with ensuring economic security, the Deposit Protection Ordinance, 2025 will boost public confidence and further strengthen the banking sector of Bangladesh," Shafiqul Alam said.
