The ‘Deposit Protection Bill, 2026’ passed in the Jatiya Sangsad on Friday to protect the interests of depositors. The law aims to strengthen financial discipline and build long-term trust and stability in the country’s financial sector.
Finance Minister Amir Khosru Mahmud Chowdhury moved the Bill, which lawmakers passed by voice vote.
The new law will repeal and replace the existing ‘Bank Deposit Insurance Act, 2000’. It seeks to make the deposit protection system stronger and more effective.
Under the Bill, the deposit insurance coverage will double. It will rise from Tk100,000 to Tk200,000 per depositor.
The legislation aims to increase public confidence in the financial system. It provides a secure legal framework for deposits held in both bank companies and finance companies.
All scheduled banks and finance companies operating in Bangladesh must become member institutions under the new framework.
The Bill also mandates the creation of two separate funds at Bangladesh Bank. These are the Deposit Protection Fund (Bank Companies) and the Deposit Protection Fund (Finance Companies). The two funds will operate independently and remain separate from the central bank’s other liabilities. The Board of Directors of Bangladesh Bank will act as the Trustee Board for both funds.
For the first time, finance companies will come under this protection system. All existing and newly licensed finance companies must join the framework by July 1, 2028.
The law sets a protection limit of Tk200,000 per depositor in case of liquidation of a member institution. Depositors will receive a maximum of Tk2,00,000 from the fund.
The government will review and may recalculate this limit every three years. Depositors with balances above the limit may still claim the remaining amount from the liquidator of the closed institution.
Member institutions will finance the system through premiums paid every three months. These payments will be based on their average deposits.
The Bill also gives the Trustee Board authority to impose fines or restrict deposit-taking activities if an institution fails to pay premiums on time.
The claim settlement process will be faster under the new system. After a liquidation order, the liquidator must send the list of depositors to Bangladesh Bank within 10 working days.
Bangladesh Bank must then settle the protected deposit amounts within the next seven working days.
Income and profits generated by the Deposit Protection Funds will remain exempt from direct taxes to support their growth.
