Deposit Protection Corporation (DPC), a subsidiary of the State Bank of Pakistan, has been set up through promulgation of the Deposit Protection Corporation Act, 2016 (the Act) passed by National Assembly of Pakistan with an aim to provide protection to small depositors of banks operating in Pakistan in order to ensure the financial stability of, and maintain the public trust in the financial system. The act extends to the whole of Pakistan and is effective from July 01, 2018.
In terms of Section 7 (3) of the Act, a Shariah-compliant mechanism of deposit protection in respect of Islamic Banking Institutions (IBIs), has been duly approved by State Bank’s Shariah Advisory Committee.
The objective of the Deposit Protection Waqf (DP Waqf) is to provide a Shariah-compliant mechanism for protected depositors of IBIs up to an amount prescribed under Section 7 (1) of the Act. (Rs. 250,000/- per depositor which is subject to change from time to time as per discretion of DPC).
A DP Waqf is established under this mechanism for protection of depositors of IBIs. The nature of DP Waqf is of an account established by Corporation (DPC) to receive premium contributions from participatory/ member IBIs for the purpose of reimbursement of protected deposits of a failed participatory / member IBI. The DP Waqf shall be represented by the Corporation (DPC) in all its affairs.
Deposit Protection Corporation Act, 2016 Click Here
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