Deposit protection limit doubled to Rs1 million per depositor

The Deposit Protection Corporation (DPC) has doubled deposit insurance coverage for eligible depositors of member banks from Rs500,000 to Rs1 million per depositor per bank, according to its annual report released on Wednesday.

The increase marks the second upward revision in coverage since the DPC was established in 2016 and is aimed at strengthening depositor protection and confidence in the banking system.

In its fifth annual report for FY2025, the DPC said total domestic deposits in scheduled banks reached more than Rs35 trillion as of June 30, 2025, representing annual growth of 15%.

Of the total deposits, Rs26 trillion were held in conventional banks and Rs9 trillion in Islamic banks.

The report stated that the growth in deposits reflected continued public confidence in the banking sector.

As of June 30, 2025, scheduled banks had 91.78 million depositors, including 73.35 million in the conventional banking system and 18.43 million in Islamic banking.

According to the DPC, 90.83 million depositors, or 99% of the total, were eligible for deposit protection.

The report noted that the current deposit protection framework fully covers 95% of all domestic depositors in scheduled banks.

The DPC also reported that its Deposit Protection Fund had crossed Rs200 billion, strengthening its capacity to fulfil its mandate.

Established under the Deposit Protection Corporation Act, 2016, the DPC operates as a subsidiary of the State Bank of Pakistan (SBP). Its mandate includes compensating depositors in the event of a member bank's failure and providing financial support for the resolution of troubled banks when required.