2:44 AM
McGhori
A draft deposit protection fund bill, prepared by the State Bank of Pakistan, provides compensation for loss to depositors in case an insured commercial bank fails to meet its obligations.
However, missing in the broad parameters of the DPF is the definition of ‘protected deposit’ which needs to be included to make it more effective.
Perhaps, the authorities were not pushed so far for establishing a separate deposit protection institution due to Sec 58(2) of the Banking Companies Ordinance 1962 which accorded priority payment to every depositor of the banking company a sum of one hundred thousand rupees or the balance at his credit, whichever is less. There was added comfort from Sec 5 (4) of the Banks (Nationalisation)...
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