Sindhu Bikas Bank deposits get insured

Sindhu Bikas Bank became the first development bank to sign the deposit insurance agreement with Deposit and Credit Guarantee Corporation for the insurance of savings and fixed deposits.

The corporation had formally started the deposit insurance from February 27 after Capital Merchant Banking and Finance signed an agreement for similar insurance for the deposits.

Already four finance companies Capital Merchant Banking and Finance, Kuber Merchant Finance, Birgunj Finance, and Lord Buddha Finance have signed agreements with the corporation and some more development banks such as Ace Development Bank and Sanima Bikas Bank are planning to go for similar agreements.

According to the deposit guarantee regulation, in case of bankruptcy of a financial institution, a small depositor, who has a deposit up to Rs 200,000, will be paid the total deposit amount and interest within 90 days from the date the institution goes under liquidation by Deposit and Credit Guarantee Corporation.

Thus, the financial institutions that get their deposits insured by DCGC will be able to pay back their depositors even in case of total failure. The government of Nepal holds 47 per cent stake in DCGC and 48 per cent stake is owned by Nepal Rastra Bank.