The Financial Express, 3 October 2012
Bangladesh Bank (BB) has set a new rate of premium for deposit insurance and coverage at Tk 0.08 (8 paisa) for every 100 taka to minimise any risk connected to the loss of depositors’ fund with a scheduled bank, officials said.
The amount payable as premium by all SCBs, SDBs, FCBs, and PCBs, will be Tk 0.08 (8 paisa). The amount payable as premium by the problem banks will be 10 paisa instead of 9 paisa. The banks that are now under an early warning system will have to pay such premium at 9 paisa per Tk 100 deposited, which was earlier 7 paisa, according to the Bangladesh Bank’s new provision.
In a BB circular issued in 2007, premium rate for Private Commercial Banks (PCBs) under Problem Bank category was 0.09 paisa, PCBs outside the ‘problem bank’ 0.07 paisa and for the then Nationalised Commercial Banks (that include SCBs, SDBs) 0.07 paisa.
The BB Tuesday issued a new circular refixing premium rates. The new premium rate will be effective from the first half of the calendar year of 2014, according to the new order.
“The BB approved the new risk-based premium rates and the amount of coverage, which will come into force after the government approves those,” a BB official concerned told the FE Tuesday.
Deposit insurance system was first introduced in Bangladesh in August 1984 aiming to minimise the risk of loss of money deposited with banks.
As per provisions of the law, the premiums collected from the insured banks are deposited in an account called the Deposit Insurance Trust Fund, maintained by the central bank. Presently, all 47 scheduled banks operating in the country are members of this Fund, which provides full protection to 88.7 per cent of the depositors.
Bangladesh has not so far experienced collapse of any bank, although two banks can be cited as crisis-ridden ones.
The Deposit Insurance Act 2000 says in case of an insured bank’s collapse or bankruptcy, BB shall pay an amount equal to the money of each depositor of that bank. However this amount will now not exceed Tk 0.2 million, which was earlier Tk 0.1 million.
Another circular of BB asked the banks to implement the SEC’s decision on Sunday last about margin-loan ratio.
The share-credit ratio, commonly known as margin loan ratio, will remain at 1:2 until June next year.
The 1:2 loan ratio means, if an investor has Tk 1 in cash or stocks worth Tk 1, he or she will be able to receive another Tk 2 as credit against the money or securities.
The ratio will come down to 1:1.5 from July 2013 and will remain effective until December of the same year.
From January 2014 the ratio will be 1:1 and from July 2014 it will be 1:0.5.
Bangladesh Economy 
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