Frequently Asked Questions (FAQs) For Banks
Disclaimer: These FAQs are being issued for information and general understanding only and shall not constitute any legal obligation on the part of Deposit Protection Corporation (DPC). These FAQs are subject to updates from time to time by the DPC. The Deposit Protection Corporation Act, 2016, rules and regulations issued thereunder shall be applicable on all the member institutions.

Deposit Protection/ Deposit Insurance is a system established to protect the deposits of eligible depositors up to a specified limit in the event of a bank being declared as a failed bank by State Bank of Pakistan (SBP).
In Pakistan, the term Deposit Protection is used.

Deposit Protection Corporation (DPC) is a subsidiary of State Bank of Pakistan (SBP) established under the Deposit Protection Corporation Act 2016 (DPC Act). The role of the Corporation is to provide a robust deposit protection mechanism to ensure payment of protected amount to the eligible depositors of a DPC member bank, in the event of it being declared as a failed bank by State Bank of Pakistan (SBP).

Presently, a protected amount of up to PKR 250,000/- per depositor per bank has been determined by DPC for the protection of eligible depositors.

Categories of depositors that have been guaranteed payment up to the protected amount under the existing deposit protection mechanism of DPC are referred as “Eligible Depositors/ Protected Depositors”.
Total Deposits held by an eligible depositor in a bank are referred to as “Eligible Deposits”. The maximum amount of reimbursement that an eligible depositor can receive from Deposit Protection Corporation (DPC) at the time of bank failure declared failed by State Bank of Pakistan is referred as “Protected Deposit”.
The following table aims to clarify the difference between Eligible and Protected Deposits:
Depositor
Category
No. of Accounts* in Same Bank
Total Eligible Deposits
(In PKR)
Protected Deposits
(In PKR)
Mr. XYZ Khan
Individual and Sole Proprietor
3
300,000
250,000
Ms. ABC Bibi
Individual
1
150,000
150,000
Mr. RAZ
Sole Proprietor
4
1,000,000
250,000
ABC Consultancy Ltd
Partnership Firm
2
700,000
250,000
WBC Builders
Partnership Firm
3
1,500,000
250,000
MNP Fitness Club
Sole Proprietor
6
1,000,000
250,000
SINCOS Foundation
Trust
1
100,000
100,000
TANG-ONN
Other
(Adventure Club)
1
50,000
50,000
*represents either conventional or Islamic or both type of accounts held by a single depositor
Presently all scheduled banks operating in Pakistan are members of DPC. Following is the list of banks that are members of DPC. This list is also available at DPC’s website: http://www.dpc.org.pk/Circulars/2020/CL1-Annex-A.pdf

    1- Industrial Development Bank Limited
    2- SME Bank Limited
    3- The Punjab Provincial Cooperative Bank Limited
    4- Zarai Taraqiati Bank Limited
    5- First Women Bank Limited
    6- National Bank of Pakistan
    7- Sindh Bank Limited
    8- The Bank of Khyber
    9- The Bank of Punjab
    10- Allied Bank Limited
    11- Askari Bank Limited
    12- Bank Alfalah Limited
    13- Bank AL Habib Limited
    14- Faysal Bank Limited
    15- Habib Bank Limited
    16- Habib Metropolitan Bank Limited
    17- JS Bank Limited
    18- MCB Bank Limited
    19- SAMBA Bank Limited
    20- Silkbank Limited
    21- Soneri Bank Limited
    22- Standard Chartered Bank (Pakistan) Limited
    23- Summit Bank Limited
    24- United Bank Limited
    25- Albaraka Bank (Pakistan) Limited
    26- BankIslami Pakistan Limited
    27- Dubai Islamic Bank Pakistan Limited
    28- MCB Islamic Bank Limited
    29- Citibank N.A.- Pakistan Operations
    30- Deutsche Bank AG- Pakistan Operations
    31- Industrial and Commercial Bank of China Limited- Pakistan Branches
    32- Bank of China Limited- Pakistan Operations
Yes, DPC has developed a Deposit Protection Mechanism for its member institutions (banks). For further details, please refer to DPC Circular No. 04, 2018 dated June 22, 2018 available at DPC’s website: http://www.dpc.org.pk/Circulars/2018/C4-Annex-A.pdf
Yes. There is a separate Shariah Compliant Deposit Protection Mechanism for Islamic Banking Institutions. For details please refer to DPC Circular No. 05, 2018 dated November 05, 2018 available at DPC’s website: http://www.dpc.org.pk/Circulars/2018/C5-Annex-A.pdf
The following Categories of Deposits are excluded from deposit protection:
1. Depositors / deposits mentioned in the list below;
    Government or Government Institutions.
    i- Member institutions of DPC.
    ii- Companies as defined under Companies Ordinance, 1984/ Companies Act 2017
    iii- Corporations, Modarbas, Mutual Funds
    iv- Branch(es)/ Permanent establishment(s) of foreign entities
    v- Diplomatic Missions and international organizations/ entities like United Nations, World Bank, IFC, ADB etc.
    vi- Autonomous Bodies
    vii- Deposits on which preferential interest or return has been granted
    viii- Members of Board of Directors and senior management of a DPC member bank
    ix- Partners of auditing firm responsible to certify DPC member bank financial statements
    x- Persons acquired rights to a deposit after State Bank of Pakistan’s notification of Bank failure under DPC Act 2016
    xi- Spouses, dependent lineal ascendants and descendants and dependent brothers and sisters of the persons specified at sr. no ix, x & xi above.
    xii- Deposits arising out of or related to transactions or actions constituting 'money laundering within the meaning of the Anti-Money Laundering Act, 2010, if the offender has been convicted of such offence
2. Amounts reported under unclaimed deposits by a member bank in compliance of section 31 of Banking Companies Ordinance 1962.
3. Deposits maintained at branches and subsidiaries of Pakistani banks operating outside Pakistan and branches located in Export Processing Zones (EPZ).
Eligible deposits maintained in following Type of Accounts are protected by DPC:
    1- All current and saving accounts including Roshan Digital Accounts (RDA).
    2- All type of branchless banking accounts
    3- Fixed term deposits
    4- Call Deposit Receipts (CDR)/ Security Deposit Receipts (SDR)
    5- 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.

    6- Foreign Currency 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.

    7- Profit on any of the above deposits accrued till cut-off date.
    8- Any other type of deposits communicated by DPC from time to time.
The amount of “eligible deposits” disclosed by a member institution (bank) in its annual audited and AGM approved financial statements forms the basis of premium charge from banks.
For Example: Premium charged from a bank during calendar year 2021 would be based on the eligible deposits disclosed in annual audited and AGM approved accounts of the bank for the year 2020.
A bank would calculate premium payable to DPC on the basis of eligible deposits disclosed in last available annual audited and AGM approved financial statements and keep doing so until the required financial statements become available. Upon the availability of approved annual audited financial statements, the bank would recalculate the premium for relevant calendar year(s) and any difference shall be settled accordingly within seven working days.
DPC has determined a fixed rate of 0.16% of eligible deposits disclosed by a bank in its annual audited and AGM approved financial statements of preceding year. The premium is payable in four equal quarterly installments.
No, banks are explicitly prohibited from recovering costs of premium from their depositors.
“Per Depositor Per Bank” principle is used to determine the coverage available to any eligible depositor up to the protected amount at the cut-off date (the date a DPC member bank is declared failed by SBP).
The following examples are intended to explain the “Per Depositor Per Bank” principle.

Example # 1: Mr. A maintains a current account with a conventional bank having account balance of PKR 100,000/-. At the cut-off date (Bank failure date), the total liability of the bank towards Mr. A shall be PKR 100,000/- only. Accordingly, he shall receive the coverage of PKR 100,000/- from DPC.
Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance
Protected Deposit
Conventional
Current
100,000
0
100,000
100,000
Total Liability & Coverage
100,000
100,000

Example # 2: Mr. A holds a term deposit in an Islamic bank with account balance of PKR 100,000/- and an accrued profit of PKR 5,000/ at the cut-off date (Bank failure date). The total liability of the bank towards Mr. A shall be PKR 105,000/-. Accordingly, Mr. A shall receive the coverage of PKR 105,000/- from DPC.

Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance
Protected Deposit
Islamic
Term Deposit
100,000
5,000
105,000
105,000
Total Liability & Coverage
105,000
105,000

Example # 3: Mr. A holds a term deposit in an Islamic banking branch of a bank with account balance of PKR 100,000/- and a profit of PKR 5,000/- at a given date. He holds another current account in conventional banking branch of the same bank with account balance of PKR 200,000/- on the same date. The total liability of the bank towards Mr. A shall be PKR 305,000/-. Accordingly, he shall receive the maximum limit of prescribed protected amount i.e. PKR 250,000/-. Moreover, the protected amount shall be proportionally distributed between Islamic & Conventional deposits of Mr. A.

Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance % Share in Total Deposits
Protected Deposit
Islamic
Fixed
100,000
5,000
105,000 34.43
86,065.6
Conventional
Current
200,000
0
200,000 65.57
163,934.4
Total Liability & Coverage
305,000 100.00
250,000

Example # 4: As an individual, Mr. A holds a current account of PKR 200,000/- and a term deposit of PKR 100,000 with a accrued profit of PKR 5,000/- in an Islamic banking branch of a bank at the cut-off date (Bank failure date). Also in the capacity of sole proprietor, Mr. A holds two more currents accounts in conventional banking branch of the same bank with account balances of PKR 200,000/- and PKR 100,000/- respectively. The total liability of the bank towards Mr. A shall be PKR 605,000/-. Accordingly, he shall receive the maximum limit of prescribed protected amount i.e. PKR 250,000/-. The protected amount shall proportionally distribute between Islamic & Conventional deposits of Mr. A.

Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance % Share in Total Deposits
Protected Deposit
Islamic
Current
200,000
0
200,000 33.06
82,644.6
Islamic
Fixed
100,000
5,000
105,000 17.34
43,388.4
Conventional
Current
200,000
0
200,000 33.06
82,644.6
Conventional
Current
100,000
0
100,000 16.53
41,322.3
Total Liability & Coverage
605,000* 100.00
250,000
* All account balances kept by an individual depositor including Sole Proprietors shall add together to arrive at the total liability of a bank towards the depositor.

Example # 5: Mr. A holds a current account of PKR 200,000/- and a joint current account with Mr. B having account balance PKR 100,000/- in an Islamic banking branch of a bank. Mr. A holds two more currents accounts in conventional banking branch of the same bank with account balances of PKR 200,000/- and PKR 100,000/- respectively. At the cut-off date (Bank failure date), the total liability of the bank towards Mr. A shall be PKR 550,000/- while total liability of the bank towards Mr. B shall be PKR 50,000/-. Accordingly, Mr. A shall receive the maximum limit of prescribed protected amount i.e. PKR 250,000/- while Mr. B shall receive a separate coverage of PKR 50,000/-. The protected amount allocated for Mr. A shall proportionally distribute between Islamic & Conventional deposits.

Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance % Share in Total Deposits
Protected Deposit
Islamic
Current
200,000
0
200,000 36.36
90,909.1
Islamic
Current
50,000*
0*
50,000 9.09
22,727.3
Conventional
Current
200,000
0
200,000 36.36
90,909.1
Conventional
Current
100,000
0
100,000 18.19
45,454.5
Total Liability & Coverage for Mr. A
550,000 100.00
250,000
Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance
Protected Deposit
Islamic
Current
50,000*
0 *
50,000
50,000
Total Liability & Coverage for Mr. B
50,000
50,000
*For a joint account, any outstanding amount shall split between the account holders according to the terms of account opening or equally (in the absence of such terms).

Example # 6: Mr. A has availed a running finance facility of PKR 200,000/- against his current account deposit of PKR 500,000/- maintained with a conventional banking branch of a bank. He also holds another current account deposit of PKR 100,000/- with an Islamic banking branch of the same bank. At the cut-off date (Bank failure date), the total liability of the bank towards Mr. A shall be PKR 400,000/- i.e. net-off amount payable to bank by Mr. A.  Accordingly, Mr. A shall receive the maximum limit of prescribed protected amount i.e. PKR 250,000/-. The protected amount allocated for Mr. A shall proportionally distribute between Islamic & Conventional deposits.

Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance Total Balance Net-off Lien % Share in Total Deposits (Net-off Lien)
Protected Deposit
Conventional
Current
500,000
0
500,000 300,000 75.00
187,500
Islamic
Current
100,000
0
200,000 100.000 25.00
62,500
Total Net Liability & Coverage
550,000 400.000 100.00
250,000

Example # 7: Mr. A maintains a current account of PKR 100,000/- with a conventional bank. The same bank has mobilized a current account deposit of PKR 500,000/- from a partnership firm “ABC Consultancy Firm” which is jointly owned by Mr. A, Mr. B & Mr. C. At the cut-off date (Bank failure date), the total liability of the bank towards Mr. A shall be PKR 100,000/- while the total liability of bank towards ABC consultancy Firm shall be PKR 500,000/. Here, Mr. A shall receive a coverage of PKR 100,000/- while ABC Consultancy Pvt Ltd shall receive a separate coverage of PKR 250,000/-.

Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance
Protected Deposit
Conventional
Current
100,000
0
100,000
100,000
Total Liability & Coverage for Mr. A
100,000
100,000
Conventional/ Islamic
Account Type
Account Balance
Accrual Balance
Total Balance
Protected Deposit
Conventional
Current
500,000
0
500,000
250,000
Total Liability & Coverage for ABC Consultancy Pvt Ltd
500,000
250,000

 

You may visit our website http://www.dpc.org.pk to access further details on deposit protection in Pakistan. You may also write to us electronically at info@dpc.org.pk or through surface mail at the following address:

DEPOSIT PROTECTION CORPORATION
2nd Floor, SBP Building, M.A. Jinnah Road,
Karachi.