BB alerts customers to rumours about bank closure

  • Chief Economics Correspondent,
    Published: 2020-02-26 22:41:47 BdST


The Bangladesh Bank has urged the public not to be misled by rumours about Deposit Insurance Act 2020.

The central bank issued a notice on Wednesday warning the customers of rumours spread on social media that they will not get back more than Tk 100,000 if their bank goes bust.

Serajul Islam, a spokesman for the Bangladesh Bank, also briefed the media.

“I am assuring the depositors that no bank will be closed in the next few years. So don’t be panicked by whatever someone says,” he said.

In 2000, the government passed the Bank Deposit Insurance Act fixing the amount of money a depositor will get back if a bank is closed.

The amount is Tk 100,000 payable within 180 days in such cases from the Deposit Insurance Trust Fund, according to the law.

There is no scope to raise the coverage in the law.

But the Bank Company Act of 1991 stipulates refunding of deposits to all customers of a closed bank from its liquidation, the Bangladesh Bank pointed out in the notice.

Moreover, the finance ministry is actively considering passage of the Deposit Insurance Act 2020 by amending the Bank Deposit Insurance Act 2020 so that the trustee board of the insurance fund, the Bangladesh Bank, can have the powers to raise or fix the amount and time for the coverage.

The planned new law aims to bring deposits of non-bank institutions under the insurance coverage as well.

“In this circumstance, the people are requested not to be panicked or misled by news published in different media,” the notice said.

The customers with more than Tk 100,000 deposited in a bank will get Tk 100,000 within 180 days if it gets closed, Serajul explained in the briefing.

The depositor will get back the rest of the amount after liquidation of the bank, he said.

The Bangladesh Bank has proposed doubling the coverage to Tk 200,000, Serajul said.

Only 8 percent depositors are currently left out of the coverage and the new law will bring around 96 percent customers under the coverage, he added.