The Advisory Council approved the ‘Deposit Protection Ordinance, 2025’ on Thursday. The ordinance raises the insured deposit limit from Tk 1 lakh to Tk 2 lakh, extending coverage to approximately 93% of depositors.
The amended law also extends deposit protection to non-bank financial institutions (NBFIs), which were not previously covered under the “Bank Deposit Insurance Act, 2000”.
In the event of a bank or NBFI failure, deposits will now be paid within 17 working days, a significant reduction from the previous 180-day payout period.
The ordinance establishes two separate funds: the “Bank Deposit Insurance Fund” for scheduled banks and the “Finance Company Deposit Insurance Fund” for financial companies.
These funds will operate independently under a trustee board, comprised of members from the Bangladesh Bank board. A new ‘Deposit Protection Division’ may be set up within Bangladesh Bank to oversee operations.
Scheduled banks will automatically become members of the deposit protection fund, while newly licensed banks must join within 30 days of obtaining their license and pay an initial premium.
All licensed NBFIs must join by 1 July 2028 and deposit their initial premium by 31 July 2028.
The ordinance also includes provisions for conditional financial support for resolving failing banks and financial companies. Under this provision, depositors of the merging five Islamic banks will receive Tk 12,000 compensation from the fund.
