KATHMANDU, Oct 7: Nepal Rastra Bank (NRB) has taken steps to bolster the safeguarding of public savings in banks and financial institutions by raising the insured amount to Rs 500,000. This significant change was introduced on Thursday when the NRB amended the integrated guidelines for the year 2079 BS.
According to the revised guidelines, licensed banks and financial institutions are now required to ensure the protection of deposits up to Rs 500,000 for individual account holders in both savings and term accounts through the Deposit and Credit Guarantee Fund. This represents a substantial increase from the previous protection limit of Rs 300,000.
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In adherence to the new regulations, banks and financial institutions are obliged to deposit up to Rs 500,000 into the Deposit and Credit Guarantee Fund. This provision aims to guarantee that in the unfortunate event of a bank or financial institution facing liquidation, the Deposit and Credit Guarantee Fund will cover losses of up to Rs 500,000, reassuring the general public about the safety of their funds even in times of financial distress.
It is worth noting that banks will be required to pay a premium of 0.16 percent to secure deposits within the fund. Manoj Kumar Gyawali, Deputy Chief Executive Officer of Nabil Bank, emphasized that while this change will lead to increased expenses for the banking sector, it will also enhance the fund's profitability, as the amount of deposit protection has been raised from Rs 300,000 to Rs 500,000. This move is expected to bolster public confidence in the security of their deposits.
