Finance Minister AMA Muhith, seen at a seminar on ‘Depositors’ Safety Fund’ at CIRDAP auditorium in Dhaka.

Finance Minister AMA Muhith Sunday underscored wider insurance coverage for the bank depositors in order to increase savings by the people.

Currently, an insurance of Tk 100,000 exists in the country for the bank depositors.

“The amount is still too insignificant to protect a depositor when the bank becomes unable to pay its debts,” said finance minister at a seminar on ‘Depositors’ Safety Fund’ at CIRDAP auditorium in the city.

He said it is high time to increase insurance coverage to a bigger amount.

Microcredit Regulatory Authority (MRA) organised the function.

MRA has undertaken an initiative to raise a Tk 300 million depositors’ safety fund for micro-finance institutions (MFIs).

The borrower-cum-depositors of 517 registered MFIs across the country can benefit from the fund.

“Though in late, it’s a good initiative,” AMA Muhith said.

Bangladesh Bank Governor Dr Atiur Rahman said the MFIs have total deposit of Tk 300 billion at present.

They are operating under MRA, Grameen Bank, BRAC and PKSF.

“We must make it sure that the depositors’ money is secured,” Dr Rahman said.

MRA has proposed a provision of providing maximum Tk 3,500 to a MFI depositor as insurance coverage.

A recent MRA study revealed that over 80 percent of the MFI depositors keep a deposit of around Tk 3,500.

Of the fund, Tk 250 million will come from the MFIs’ premium and investments while the rest Tk 50 million will be collected from the government sectors.

“We need a ‘seed fund’ for a start now. Gradually, we will be able to broaden the fund to all MFIs’ deposits, if the government helps us,” said Khandakar Mujharul Haque, the executive vice-chairman of MRA.

The Daily Sun/Bangladesh/ 23th July 2012