Deposit Insurance Cap Doubled: Bangladesh Bank Proposes Two Lakh Taka Refund in New Ordinance
Dhaka, March 23, 2025 – In a significant move aimed at bolstering depositor confidence, Bangladesh Bank has unveiled the draft of the ‘Deposit Protection Ordinance, 2025’, proposing to double the maximum refund amount to two lakh taka in the event of a bank or financial institution closure. The draft ordinance, now published on the website of the Financial Institutions Division of the Ministry of Finance, marks a substantial increase from the current limit of one lakh taka, as stipulated by the existing Deposit Protection Act.
The proposed ordinance comes at a crucial time, seeking to provide greater financial security to depositors amidst evolving economic uncertainties. The Ministry of Finance has now opened the draft for public consultation, inviting feedback and suggestions from all stakeholders. This initiative underscores the government’s commitment to transparency and inclusivity in shaping financial policies.
The decision to revise the deposit protection limit reflects a long-standing intent of the Awami League government. Previous efforts to increase the refund ceiling to two lakh taka had not materialized, making this proposed ordinance a pivotal step towards fulfilling that commitment. The enhancement is expected to instill a sense of security among depositors, particularly those with modest savings, and strengthen the overall stability of the financial sector.
The proposed ordinance is anticipated to have far-reaching implications for the banking and financial landscape of Bangladesh. By doubling the guaranteed refund amount, the central bank aims to mitigate the potential impact of financial institution failures on individual depositors. This measure aligns with international best practices and is designed to safeguard the interests of the public, thereby fostering a more resilient and trustworthy financial system.
