Bangladesh Bank (BB) has started holding meetings of bank officials and depositors to create awareness about Deposit Insurance Scheme (DIS), which is designed to minimize the risk that the depositors suffer for placing funds with a bank.

As part of this move, the central bank held meetings of bank officials and depositors in Chittagong and Khulna regions. It will organize such meetings in different regions in the next two months.

“Customers of commercial banks are not aware about the DIS . . . we are organizing such meetings to aware them because protecting the interest of depositors is our prime responsibility,” Khagesh Chanda, General Manager of BB’s Deposit Insurance Scheme, told BSS.

The purpose of DIS is to help increase market discipline, reduce moral hazard in the financial sector and provide safety nets at the minimum cost to the public in the event of a bank failure, he added.

He said BB will organize such meeting of bank officials-depositors in Barisal, Rajshahi, Rangpur, Bogra, Sylhet, Mymensingh and Dhaka.

BB set the rate of premium for deposit insurance and coverage at Taka 0.07 (7 paisa) for every 100 taka to minimise any risk connected to the loss of depositors’ fund with a scheduled bank. Premium rate will be at Taka 0.08 from the first half of the calendar year of 2014.

As per provisions, the premiums collected from the insured banks are deposited in an account called the Deposit Insurance Trust Fund, maintained by the central bank