74% of Bank Deposits in Bangladesh Remain Uninsured

Staff Correspondent: Nearly 74% of the total money deposited in Bangladesh's banks was not covered by deposit insurance at the end of 2025. According to a Bangladesh Bank financial report, only 26.30% of total bank deposits were covered by insurance during that period.

However, 93.04% of depositors were covered by the insurance system. This is because most customers keep relatively small amounts of money in their accounts, while larger deposits are not fully insured. Being uninsured does not necessarily mean that depositors will lose their money.

Under the Deposit Protection Act, 2026, a depositor can receive protection of up to Tk 200,000 at each bank. The previous limit was Tk 100,000.

Deposit insurance is a system designed to protect customers' savings if a bank is legally closed. Banks regularly pay premiums into a protection fund to provide this coverage. Customers do not have to pay any separate premiums. The premiums paid by banks are determined based on their deposit amounts and financial risks.

For example, if a customer has Tk 500,000 in a bank that is legally closed, the customer can receive up to Tk 200,000 through deposit insurance. Recovery of the remaining Tk 300,000 will depend on the bank's available assets, recovery of outstanding loans and other legal procedures.

If a customer holds several accounts at the same bank, the total insurance coverage will still be limited to Tk 200,000. However, deposits held at different banks will be protected separately, with the same limit applying to each bank.

Savings accounts, current accounts, fixed deposit receipts (FDRs) and deposit pension schemes (DPS) are generally covered by deposit insurance. However, deposits made by government institutions and other banks are excluded. Investments in shares and mutual funds are also not covered.

According to Bangladesh Bank, the deposit protection fund stood at Tk 15,624 crore at the end of 2025, down from Tk 16,871 crore a year earlier. This represents a decline of Tk 1,247 crore in one year.

The new law also allows money from the deposit protection fund to be used for restructuring troubled banks under certain conditions.

However, customers cannot claim insurance payments simply because their bank is facing financial difficulties. The bank must go through the required legal process before insured deposits can be paid.

Under the law, the person appointed to manage the settlement of a bank's assets and liabilities must submit a list of depositors within 10 working days of appointment. Bangladesh Bank must then pay the insured deposits within seven working days of receiving the necessary information.

The new law also extends deposit protection to customers of finance companies. These companies are scheduled to become members of the deposit protection system from July 1, 2028.