Deposit Protection Mechanism

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.

Under the provisions of 7(1) of the Act, an amount of Rs. 250,000/- (Rupee two hundred fifty thousand only) per depositor has been determined by the DPC as the guarantee amount, which is subject to change from time to time. The guaranteed amount may also be referred to as the protected amount or protected deposit. The guarantee amount shall become payable to the protected depositors, if a member bank/institution has been notified by State Bank of Pakistan as a failed institution under section 21(1) of the Act.