New ordinance increases bank deposit protection to Tk 200,000

The government says the previous law had no guarantee for financial institutions' deposits, but now it includes a protective measure

The government has approved a draft of the “Deposit Protection Ordinance, 2025”, which will increase the deposit guarantee from Tk 100,000 to Tk 200,000 for bank and financial institution depositors.

The ordinance was approved by the Advisory Council, ensuring that if a bank or financial institution is liquidated, each depositor will receive compensation up to Tk 200,000.

The decision was finalised during a meeting of the Advisory Council, and the draft ordinance was approved by the Finance Ministry’s Financial Institutions Division.

The move amends the 2000 “Bank Deposit Insurance Act” to include deposit guarantees for financial institutions, which were previously not covered.

Shafiqul Alam, press secretary to the chief advisor, said in a media briefing, “Previously, the deposit guarantee was Tk 100,000. It has now been raised to Tk 200,000, covering approximately 93 percent of the 165 million depositors in the country.”

The ordinance, which consists of six chapters and 33 sections, also introduces two separate protection funds: one for banks and one for finance companies. These funds will be independent of other Bangladesh Bank funds and managed by a trustee board.

Licensed financial institutions will be required to submit an initial premium by July 2028, ensuring their membership in the new protection scheme.

The ordinance also outlines that the maximum deposit guarantee will be reviewed every three years.