KARACHI – The Deposit Protection Corporation (DPC), a subsidiary of the State Bank of Pakistan (SBP), has achieved a significant milestone by being admitted as the 84th member of the International Association of Deposit Insurers (IADI). The decision was made by the Secretariat of IADI, as announced on February 11, 2019, and was confirmed in a statement released by the SBP on Friday.
The IADI, established in 2002 as a non-profit organization under the auspices of the Bank for International Settlements (BIS), serves as a global body of deposit insurers. The primary objective of the association is to contribute to the effectiveness and safety of deposit insurance by fostering guidance and international cooperation among its members.
DPC’s inclusion as a member of IADI signifies a step forward in aligning itself with international best practices and standards in the realm of deposit protection. The association provides a platform for deposit insurers worldwide to convene, share knowledge, and exchange expertise. Through training programs, educational initiatives, and the production of research and guidance materials, IADI supports the development and enhancement of deposit insurance systems, crucial elements in ensuring financial stability.
In addition to its role as a knowledge-sharing forum, IADI actively collaborates with international organizations dedicated to promoting global financial stability. This collaboration enhances the effectiveness of deposit insurance systems by integrating insights and experiences from various corners of the globe.
Membership in IADI opens doors for DPC to engage in institutional capacity building and facilitates increased interaction with international deposit insurers. This exchange of ideas and practices is expected to provide valuable insights for DPC, enabling it to enhance its operations and better fulfill its mandate of compensating small and financially unsophisticated depositors up to the protected deposit limits.
The recognition by IADI aligns with the strategic goals outlined in the State Bank of Pakistan’s (SBP) Strategic Plan 2016-20. Strengthening the financial system stability regime is a key objective of the SBP, and DPC’s membership in IADI is expected to contribute significantly to this overarching goal.
Established under the Deposit Protection Corporation Act, 2016, DPC operates as a wholly owned subsidiary of SBP. The corporation’s mission is to provide compensation to small depositors in the event of financial institution failures, thereby reinforcing public confidence in the banking system.
As DPC becomes an integral part of the global network of deposit insurers through IADI, it positions itself to play a more active role in shaping the future of deposit protection both domestically and on the international stage. The collaboration with IADI is poised to be mutually beneficial, fostering a robust and resilient deposit insurance framework that contributes to the stability of financial systems worldwide.
