Bank Account Deposit Protection Limit Raised to Rs500,000
Enhanced Protection for Bank Deposits
In a significant move to safeguard depositors, the deposit protection limit has been increased to Rs500,000. This enhancement was discussed during a meeting of the Senate Standing Committee on Finance, chaired by Senator Salim Mandviwala, which reviewed the Deposit Protection Corporation Amendment Bill 2024.
Deputy Governor of the State Bank of Pakistan informed the committee that, “Now money up to Rs500,000 in banks will receive legal protection,” up from the previous limit of Rs250,000.
Understanding Deposit Protection Schemes
Deposit protection schemes are critical in managing the risk associated with the failure of individual banks. They aim to prevent a single bank’s collapse from causing widespread financial instability and systemic issues. By offering protection on a standalone basis, these schemes help mitigate the risk of contagion, ensuring greater stability within the banking sector.
