At the end of June 2081, deposits of 14 trillion 30 billion 46 million were secured in 45.7 million 95 thousand accounts in the name of natural persons.
What you should know
About half of the total deposits of natural persons in banks and financial institutions and microfinance have been insurance (protection) of 16 trillion rupees. According to the Deposit and Credit Protection Fund, 15 trillion 79 billion 5 crore rupees are insured out of 571 lakh 36 thousand deposits (current, call, savings and term) in the accounts of common people (natural persons) in financial institutions of categories 'A' to 'D'.
At the end of June 2081, 14 trillion 30 billion 46 million deposits were secured in 45.7 million 95 thousand accounts in the name of natural persons. According to the provision of minimum insurance of 5 lakh rupees, the deposit account of personal account has been insured for the amount mentioned so far.
The Deposit and Loan Protection Fund has protected the loans of banks and financial institutions worth 3 trillion 27 billion 42 crores worth of small and poor class loans, small and medium industry loans and agricultural loans (including the subsidized loans of the Government of Nepal with interest subsidies). At the end of June 2081, such loans worth 2 trillion 96 billion 45 crores were secured.
The government has arranged for the protection of deposits up to five lakh rupees in cooperatives through the budget of the current financial year. "Deposits of up to lakhs of savings in cooperative organizations will be protected through the deposit and loan protection fund," it is said in the budget statement of the current financial year. Accordingly, the government has established a cooperative debt recovery tribunal and has started its work.
At present, the fund is protecting the deposits of 55 institutions. Deposit protection facility is only for deposits in individual deposit (natural persons) accounts. Institutional deposits (deposited by institutional depositors) are not insured. After the deposit insurance, if the bank or financial institution goes bankrupt for some reason, each individual depositor who deposits in that institution gets a maximum payment of Rs 5 lakh.
Among the deposits in banks and financial institutions, only one person's deposit is protected in one institution. For example, even if the same person has more than one account in an institution, the deposits in all those accounts will not be protected. But if the same person has an account in more than one bank and financial institution, all the accounts are insured at a rate equal to the specified amount (5 lakhs).
With the aim of protecting the savings of small depositors, the government introduced such a program about a decade ago. Under this provision, till now the depositors of Himalaya Finance have got back about 11 crore rupees. After Himalaya Finance went into liquidation, the individual depositors who deposited in that institution got their money back at the maximum rate of 2 lakhs according to the previous arrangement.
For deposit protection, banks and financial institutions should enter into an agreement with the Deposit and Credit Protection Fund. It is a type of deposit insurance. But according to international practice, such insurance is called deposit protection, so Nepal has followed the same. Its official body in Nepal is the Deposit and Credit Protection Fund. The fund, which has been protecting loans since 031, is also protecting deposits since 067.
By the end of June 2082, the total number of banks and financial institutions is 107. Among them are 20 commercial banks, 17 development banks, 17 finance companies, 52 microfinance financial institutions and 1 infrastructure development bank. The number of branches of banks and financial institutions was 11 thousand 530 at the end of June 2081 and has increased to 11 thousand 526 at the end of June 2082. According to Rastra Bank, the branch population was 2 thousand 529 at the end of June 2081 and 2 thousand 530 at the end of June 2082.
