Deposit Protection Mechanism in Pakistan

Deposit Protection Mechanism in Pakistan

"Customer Alert: In order to enhance depositors’ confidence and support financial stability, DPC has decided to enhance the level of protected deposit from Rs. 250,000/- (Rupees Two Hundred and Fifty Thousand) to up-to Rs. 500,000/- (Rupees Five Hundred Thousand) per depositor-per bank with immediate effect."

State Bank of Pakistan (SBP) has launched "Deposit Protection Mechanism" for Banking Companies vide DPC Circular No. 4 of 2018 dated June 22, 2018. Which is effective from July 01, 2018.

In accordance with Section 7(1) of the Deposit Protection Act 2016, an amount of PKR 250,000/ (Two hundred and fifty thousand only) per depositor has been determined by the Deposit Protection Corporation (DPC) as the protected amount, which is subject to change from time to time.

Funds of protected depositors held in following type of accounts are protected:

  • All current and saving accounts;
  • All type of branchless banking accounts;
  • Fixed term deposits;
  • CDRs/ SDRs;
  • Deposit balance kept as cash margins/ collateral or under lien, that are payable to depositors after satisfaction of all dues that are payable by them to the bank;
  • FCY Deposits. In case of an eventuality, the equivalent PKR at the exchange rate declared by SBP on notification date, shall be reimbursed to the protected depositors;
  • Profit accrued till cut-off date;
  • Any other type communicated by DPC from time to time.

For more details, please refer below DPC circulars via

  • DPC Circular No. 1 of 2018 – Notification of Board of Directors
  • DPC Circular No. 2 of 2018 – Declaration of Commencement of Business of Deposit Protection Corporation
  • DPC Circular No. 3 of 2018 – Member Institutions of Deposit Protection Corporation
  • DPC Circular No. 4 of 2018 –Deposit Protection Mechanism