Good news for the banks account holders as amounts up to Rs500,000 in bank accounts would receive legal protection.
The Senate Standing Committee on Finance has approved the Deposit Protection Corporation Amendment Bill and the Banking Companies Amendment Bill 2024.
Deputy Governor of the State Bank Dr. Inayat Hussain while briefing the committee on the bill stated that under the amendment bill, amounts up to Rs500,000 in banks would receive legal protection.
The meeting of the Senate Standing Committee on Finance, chaired by Chairman Saleem Mandviwalla, approved the Deposit Protection Corporation Amendment Bill and the Banking Companies Amendment Bill 2024.
Previously, deposits up to Rs. 250,000 were protected.
He further informed that microfinance banks are not included in this bill.
The Deputy Governor of the State Bank mentioned that there is an intention to include microfinance banks in the bill in the future. Currently, a separate protection system is in place for them, but the board will have the authority to decide whether to include microfinance banks or not.
During the committee meeting, the Chairman raised the issue of loans provided through Islamic banking, pointing out that up to 20% interest rates are charged in conventional banking.
It was revealed that several such cases have emerged, prompting the standing committee to request a detailed briefing from the State Bank on Islamic banking.
The meeting also disclosed that Rs. 97 billion have been lying dormant in temporarily closed accounts for the past 10 years.
The officials from the central bank revealed that 14 million bank accounts across various banks are temporarily closed.
A proposal has been made to extend the period for permanently closing these accounts from 10 years to 15 years.
The officials stated that after sending three notices to account holders, the funds are transferred to the State Bank while millions of account holders still come to reactivate temporarily closed accounts even after 10 years.
The Finance Committee approved the State Bank’s proposal to reactivate temporarily closed accounts.
