The government has enacted the Deposit Protection Act, 2026 (Act No. 75 of 2026), a landmark legislation, aimed at safeguarding small depositors and strengthening discipline in the country\u2019s financial sector.<\/p>\n\n\n\n
The new law, which received presidential assent on April 10, 2026, replaces the Bank Deposit Insurance Act, 2000 (Act No. 18 of 2000) and the Deposit Protection Ordinance, 2025, introducing a modern and unified legal framework for both banks and financial institutions.<\/p>\n\n\n\n
The law brings clarity to joint accounts. According to Section 22(1) (c), unless ownership shares are legally specified, deposits in joint accounts will be divided equally among account holders for the purpose of calculating insurance payouts, ensuring fairness and transparency in compensation.<\/p>\n\n\n\n
The act expands its coverage to all member institutions, including scheduled banks and financial companies operating in Bangladesh. <\/p>\n\n\n\n
To ensure more effective fund management, it mandates the creation of two separate funds\u2014one for bank companies and another for financial companies\u2014allowing for more specialized oversight and resource allocation. <\/p>\n\n\n\n
It also defines deposits broadly, covering demand deposits, fixed or time deposits, and other repayable funds, whether interest-bearing or interest-free.<\/p>\n\n\n\n
To oversee implementation, Section 5 authorizes Bangladesh Bank to establish a dedicated Deposit Protection Department. <\/p>\n\n\n\n
The funds will be managed by a Trust Board composed of the central bank\u2019s board of directors. <\/p>\n\n\n\n
Recognizing the importance of Islamic finance, the law also empowers the Trust Board to form a separate committee to ensure that operations related to Islamic banks and financial institutions remain compliant with Shariah principles.<\/p>\n\n\n\n
The act introduces a structured premium system to sustain the funds. New member institutions are required to pay an initial premium at a rate of 0.05 percent of their paid-up capital within 30 days of obtaining a license. <\/p>\n\n\n\n
In addition to providing insurance coverage, the fund is designed to play a proactive role in maintaining financial stability. <\/p>\n\n\n\n
It can be used to support resolution measures, including the establishment of bridge banks, enabling authorities to manage distressed institutions more effectively rather than relying solely on liquidation.<\/p>\n\n\n\n
The sources of the fund include premiums collected from member institutions, recoveries from the assets of liquidated entities, initial funding or grants from the government or central bank, income generated through safe investments, as well as penalties and other approved sources. This diversified funding structure is intended to ensure sustainability and resilience.<\/p>\n\n\n\n
The law also establishes strong accountability mechanisms. It requires that the funds be audited annually within three months of the end of the financial year, and that a comprehensive report be submitted to the government within 30 days of the audit\u2019s completion.<\/p>\n\n\n\n
With the enactment of this legislation, the previous deposit protection laws have been repealed. However, a savings clause ensures that all actions taken and funds established under the earlier framework remain valid and are seamlessly integrated into the new system.<\/p>\n\n\n\n
The Deposit Protection Act, 2026 is expected to significantly boost public confidence in the country\u2019s banking and financial sector by providing a stronger and more reliable safety net for depositors. <\/p>\n\n\n\n
Effective immediately, it equips the central bank with enhanced legal and institutional tools to protect depositors and uphold financial stability.<\/p>\n","protected":false},"excerpt":{"rendered":"
The government has enacted the Deposit Protection Act, 2026 (Act No. 75 of 2026), a landmark legislation, aimed at safeguarding small depositors and strengthening discipline in the country\u2019s financial sector. The new law, which received presidential assent on April 10, 2026, replaces the Bank Deposit Insurance Act, 2000 (Act No. 18 of 2000) and the […]<\/p>\n","protected":false},"author":6,"featured_media":34049,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,93],"tags":[54],"class_list":["post-34048","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bangladesh","category-nationwide","tag-54"],"yoast_head":"\n