The Role of Deposit Insurance for Banking Sector ...

Bank Parikrama Volume XXXIX, Nos. 1 & 2, March & June 2014 (pp. 100-112)

The Role of Deposit Insurance for Banking Sector Stability with Special Reference to Bangladesh - Mohammad Mohiuddin Siddque - Md. Shahid Ullah - Mohammad Shahriar Siddiqui

Abstract Deposit Insurance System (DIS) plays an important role in maintaining the financial stability by protecting at least the small depositors in line with the public policy goal of ensuring social justice. DIS reduces the possibility of bank run, improves risk management capacity of banks, and provides arrangement for winding up of failing banks and establishing an exit path. This study attempts to analyze the features of DIS in the global as well Bangladesh context, the pros and cons of DIS, its implications in Bangladesh, and to compare the status of DIS of Bangladesh with that of the neighboring countries. The contribution of DIS to financial stability in Bangladesh is not tested because of government’s forbearance to weak banks, and lack of awareness on the part of the depositors. Therefore, the degree of moral hazard arising from DIS is not acute in the banking sector of Bangladesh. Keywords: Deposit Insurance, Banking Sector Stability, Moral Hazard, Bank Run JEL Classification: G21, G22

1.

Introduction

Banking instability has emerged as a major problem in recent times that prompts searching for ways to protect savers to ensure the viability of banking systems. A properly designed financial system safety net program contributes to the stability of the financial system; otherwise it may create moral hazard (BCBS and IADI 2009). Smooth functioning of the financial system rests upon a number of mechanisms like a set of prudential norms supported by the appropriate legal framework, lender of last resort facility, deposit insurance system, etc. The basic objective of deposit insurance schemes is to avoid bank runs by small, uninformed depositors by protecting their deposits. Deposit 

The authors are Associate Professor, BIBM; Assistant Professor, BIBM; and Joint Director, Bangladesh Bank, Dhaka, respectively. Views expressed in this article are the authors’ own. Accepted for Publication in August, 2012.

Siddque, Ullah and Siddiqui : The Role of Deposit Insurance for Banking Sector

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insurance schemes, in a normal situation, have a stabilizing effect by reducing the risk of contagion to illiquid but solvent banks and are facilitating the orderly resolution of troubled banks (Feyen and Vittas 2009). The idea of insurance system for the depositors of a failed bank came into being in the USA in the 1930s as a response to the wide scale bank failure, a period known as the Great Depression. From then on, it gained popularity across the countries and by now has become a common institution both in the developing and developed countries. Although DIS is given credit for the achievement of stable financial system, it is not an unmixed blessing. DIS acts as a double-edged sword in that it can help curb the bank run at first signs of trouble but may encourage institutions taking high risk. Many economists point to the moral hazard problem that DIS brings in the behavior of the users of financial services and the accompanying excessive risk taking by banks (Demirguc-Kunt and Kane 2002). However, moral hazard may be mitigated through other elements of the safety net programs, e.g., good corporate governance and sound risk management of individual banks, effective market discipline and frameworks for strong prudential regulation, supervision and laws (BCBS and IADI 2009). Although the common objective of DIS is to compensate the small depositors, the practice of DIS varies considerably in different countries. Various elements of DIS e.g., sponsorship of the fund, types of financial institutions covered by the program, insurance coverage, premium assessment procedure, exit policy might be structured in alternative ways. Different combinations of these elements have different implications for setting the tone of the financial sector. Thus, the appropriate kind of DIS for a particular country is always a matter of debate. The concept of deposit insurance is not new in Bangladesh. Deposit insurance was launched as a toolkit to stabilize financial system of Bangladesh way back to 1984. The Government of Bangladesh and Bangladesh Bank, the central bank of the country were vigilant about balanced growth and stability of the financial sector. As such, the Bank Deposit Insurance Ordinance, 1984 was promulgated as a part of the government safety net programs. Subsequently, in 2000, the Ordinance was repealed by an Act of the Parliament called the "Bank Deposit Insurance Act, 2000". Bangladeshi banking system has not experienced any major shock since its independence. That is not to mean that all the banks were sound at all the times. The underlying reason of not observing bank failure is the unwillingness of the

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Government to allow any bank to fail. So, one may be skeptic about the desirability of DIS in Bangladesh. DIS was never required to apply, it mainly remained as an inactive and unnoticed policy tool. It seems that there exists large scale ignorance among the depositors about the system. In this context, it is useful to know the implications of deposit insurance system in Bangladesh. A closer examination of the DIS will allow us to assess the strength and weaknesses of DIS in Bangladesh. A large volume of literature is available where various facets of deposit coverage schemes have been studied in the context of different countries. But, until now very few attempts have been made to analyze the pros and cons of DIS in Bangladesh. Against this backdrop, this study attempts to discuss the features of DIS in the global as well as Bangladesh context. The specific objectives of the paper are: One, analyzing the Deposit Insurance System in Bangladesh; Two, examining the merits and demerits of the DIS; Three, discussing the implications of DIS in Bangladesh; and Four, comparing the status of DIS of Bangladesh with that of the neighboring countries. This is a qualitative study and findings are based on examinations of published reports, consultation with bankers, and discussions with academicians and experts. Published literature, research papers, annual reports, and websites of different banks, were reviewed to form theoretical foundation and backdrop of the paper. The paper is organized into six sections. After stating the background, objectives and methodology in Section-1, Section-2 attempts to discuss the merits and demerits of DIS and DIS in Bangladesh has been discussed in Section-3. Section-4 illustrates the DIS practices in different countries. Finally, conclusion is placed in Section-5. 2.

Merits and Demerits of Deposit Insurance System

Deposit insurance system contributes to financial stability by reducing the probability of bank run and increasing public confidence over the banking sector. However, it also involves moral hazard and other problems. Some of the positive and negative aspects of DIS are outlined below. Deposit insurance system is designed to eliminate the risk of losing deposit with a bank as it offers protection to, at least, the small savers. Generally, the lower amount of deposit that remains under the coverage of the scheme represents whole or bulk share of savings of small depositors. One problem associated with the small savers is that they do not possess sufficient knowledge to judge the riskiness of a bank. It can be safely argued


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that the large depositors will withdraw their deposits from a bank facing crisis before a large number of the less-informed small depositors. Protecting the small depositors is consistent with the public policy goal of ensuring social justice. DIS saves the solvent bank by reducing the possibility of panic among the depositors. Depositors’ concern about the safety of deposits arising either from observable fact or from rumour can lead to the costly bank runs resulting in failure of even a bank having the ability to meet depositors’ demand. The depositors are unlikely to consider the safety and soundness of a bank without any guarantee. As a result, having a deposit insurance system assures households and small-size businesses that their funds are secure. This, in turn, maintains the stability and smooth functioning of the economy. Risk-based premium also forces a bank to improve its risk management capacity. In contrast to full coverage, the system of explicit deposit insurance encourages risk-monitoring by certain creditors ex ante and, ex post. It is said that large banks have an advantage over the smaller ones in collecting deposits at lower cost because of their size and recognizable names in the market. A well-defined deposit insurance system can off-set this by providing the banking sector with a level playing field where all banks irrespective of their size and age have access to deposit protection. In this way, deposit insurance system helps create a competitive environment for the banking sector. However, the economic basis of this argument is not quite convincing as it is known that big banks are more effective due to their volume of operation (economies of scale) and experience. Thus, the argument of equal competition in case of deposit insurance system can be considered as keeping inefficient banks alive. The explicit rules of the deposit insurance system provide some sort of assurance about the resolution process of failed banks that can be extremely important for maintaining financial stability during financial catastrophe. Moreover, a well codified deposit insurance program makes proper arrangement for winding up of the failing institution, and can establish an orderly exit path. Although deposit insurance system, being an integral part of the financial safety network programs, contributes a lot towards the promotion of stability and economic growth, it involves a number of inherent problems. The most acute problem associated with the DIS is the moral hazard that results in

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distortions of incentives. The protection provided by the DIS might lead to reckless behavior by both the depositors and the bankers and can aggravate the moral hazard altering the normal risk-return trade-off for banks, reducing the costs associated with riskier investment strategies. The moral hazard can be explained both from the depositors’ and bankers’ point of view. When the depositors think that their deposits are protected against bank run, they might have little incentive to assess and monitor bank risk-taking, and might simply look for the maximum possible return on their deposits. Consequently, deposits might move away from prudently managed banks to those offering higher return but assuming higher risk. From the bankers’ point of view, the existence of DIS might induce a bank to take greater risk due to the fact that any negative consequences can be shifted to the deposit insurer. From the savings-and-loan crisis in the United States and banking problems in the Scandinavian countries during the 1980s, and the recent crises in Japan, Korea and other Asian countries, it is evidenced that moral hazard can be very costly. Though moral hazard was not the only factor responsible for these crises, it contributed highly to the cost of resolution in all cases. These distortions of incentives are inherent to some extent in the nature of almost all sorts of insurance, and even the best designed one cannot be expected to get rid of moral hazard. Financial innovation gets momentum under a competitive environment. A blanket guarantee that is designed to thwart all failures will restrain innovation and reduce the sensitivity of the banking industry to changing banking environment. As DIS provides some sort of certainty among the banks, it leads to some kind of inertia on the part of the banks leading to unwillingness to deploy adequate resource in devising innovative products. Regulatory and supervisory strength of a country is an important pillar for ensuring financial stability by reducing the risk of the banks. But, the objective of stability will be impaired if deposit insurance system is coupled with lax supervision standard. By bailing out not only small but also large depositors and creditors, poorly designed deposit insurance schemes have reduced market discipline, which in the absence of effective bank supervision has often resulted in imprudent and unchecked risk-taking by banks with subsequent fragility (Demirguc-Kunt and Detragiache 2002; Demirguc-Kunt and Huizinga 2004). Moreover, the necessity of DIS for financial sector development has


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not been confirmed by empirical evidence across different countries; in contrast, it is found that the countries with liberal deposit insurance schemes ended up with lower levels of savings and private sector lending (Cull et al. 2005). It is true that DIS helps minimize the systemic risk but the problem is in dealing with catastrophic loss. For large scale failure, deposit insurance fund might not be sufficient to pay out all the depositors. If that happens even for only one instance, the system might lose its credibility for a quite long period of time. Now, if we look at a system which is less prone to bank failure, having a deposit insurance fund involves waste of resources ex post and thus can be thought of as a way of diverting fund from productive uses. 3.

Deposit Insurance System in Bangladesh

Deposit Insurance System (DIS) was introduced in Bangladesh in August 1984 by enacting the Bank Deposit Insurance Ordinance, 1984, as an attempt to reduce the risk of loss of depositors' fund with banks. Subsequently, the Bank Deposit Insurance Ordinance, 1984 was replaced by the Bank Deposit Insurance Act, 2000. A fund in the name of the Deposit Insurance Trust Fund (DITF) has been created with a view to providing protection to some extent to the small depositors (not exceeding Taka 0.10 million) in case of winding up of any bank. Payment amounting to Taka 100,000 (maximum) per depositor of the liquidated bank is guaranteed as Government will contribute, in case of any short fall, the required amount to the deposit insurance fund at bank rate. The fund gets to be accumulated mainly with premiums from member banks and income accruing from investment of the fund. All the scheduled banks of the country are required to be member of the scheme. The initial premium rate of the fund was at the rate of 0.07 per cent of deposit. Subsequently, a revised risk-based premium rate was introduced in January 2007. Under the revised framework the problem banks are required to pay premiums at the rate of 0.09 per cent whereas other banks are required to pay premiums at the rate of 0.07 per cent of their deposits. In case of failure or nonpayment of premium, Bangladesh Bank (BB) has the authority to realize the required amount from the current account of the member banks maintained with it. In case of repeated failure, BB preserves the authority to direct the failed bank, by giving the opportunity for hearing and circulating in the Government Gazette, to refrain from receiving fresh deposit.

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Deposit Insurance Act, 2000 allows every member bank to be treated as an insured bank and preserves the right to collect premium from the member banks on half yearly basis, at the prescribed rate from time to time, based on deposits held by a member bank as of preceding 30 June or 31 December each year. The act empowered the Board of Directors of BB to work as the Trustee Board of Deposit Insurance Trust Fund (DITF) and made the DITF responsible for the management and administration of the Fund. In order to inform the public with a view to stabilizing the payment system in the banking sector, the different facets of deposit insurance scheme such as its nature, operating procedures, level of coverage, premium rates, etc. along with the last audited balance sheet are disclosed in the BB website from time to time. As at June 30, 2011 the total asset of the Fund was Taka 1833 crore of which Taka 1773 crore was invested in government securities. Besides establishing DITF, BB became a member of International Association of Deposit Insurers (IADI) in 2006 and is participating in the international affairs associated with DIS. Recently, the Board of Directors of BB as the Trustee of the DITF proposed a new risk based premium rate and the amount of coverage, which are waiting to get the approval from the Government. In the proposed policy, the banks that are now under an early warning system have to pay premium at the rate of 0.09 percent instead of 0.07 percent (The Daily Star 2010). The premium payable for the problem banks is at the rate of 0.10 percent instead of 0.09 percent and for regular banks, it is 0.08 percent instead of 0.07 percent. However, State-owned Commercial Banks (SCBs) are not charged a riskbased premium even though they are problem banks and operating under Memorandum of Understanding (MOU). Materially, SCBs enjoy an implicit subsidy for their total deposits given that the government is unlikely to let the SCBs to be liquidated and depositors to suffer losses (Vinals and Singh 2010). The deposit insurance system in Bangladesh covers a significant share of the insured deposits. Roughly more than eighty five percent of depositors are fully insured, which indicates a comprehensive safety net for the small depositors, who make up the vast majority of total depositors (Bangladesh Bank 2010). Bangladesh has not so far experienced any collapse of bank, although three banks, namely, BCCI, Oriental and Commerce Bank were cited as crisis-ridden ones. Against this backdrop, the DITF has remained unutilized since its inception. The central bank managed panicky depositors well by restructuring BCCI (as Eastern Bank Ltd.), Oriental Bank (ICB Islamic Bank Ltd.) and Commerce Bank (Bangladesh Commerce Bank Ltd.) when those


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banks fell into severe crisis in the past (The Daily Star 2010). However, the role of the DIS in failed banks’ resolution has not been determined yet. Therefore, the scheme is expected to function as a pay box and no payment has been made out of the fund as no bank has been liquidated as yet (Vinals and Singh 2010). 4.

Deposit Insurance System in Different Countries

The United States is the first in history to adopt an explicit deposit insurance system which dates back to 1934 - a year marked by a banking crisis. Deposit insurance was first introduced in East Asia by the Philippines in 1963, followed by Japan in 1971, Taiwan in 1985 and Korea in 1996. The DIS established in India in 1962 following two banks failure in 1961 (DemirgucKunt et al. 2005; Walker 2007). Deposit insurance has become an increasingly used tool to assure the stability of banking system and protect depositors from incurring losses due to bank failures. Features of deposit insurance systems in some selected Asian countries, namely India, Sri Lanka, Afghanistan, and Pakistan are given below. India

Deposit insurance system came into being in India in 1962 through the enactment of The Deposit Insurance and Credit Guarantee Corporation Act, 1961” (DICGC Act). Deposit Insurance Scheme was initially extended to all commercial banks functioning in India. With the enactment of the Deposit Insurance Corporation (Amendment) Act, 1968, deposit insurance was extended to co-operative banks and the Corporation was required to register “eligible co-operative banks” as insured banks. The Reserve Bank also formed a public limited company on January 14, 1971, named the Credit Guarantee Corporation of India Ltd. (CGCI). The credit guarantee schemes introduced by CGCI, aimed at encouraging the commercial banks to cater to the credit needs of the hitherto neglected sectors, particularly the weaker sections of the society engaged in non-industrial activities, by providing guarantee cover to the loans and advances granted by the credit institutions to small and needy borrowers covered under the priority sector as defined by the Reserve Bank of India (RBI). With a view to integrating the functions of deposit insurance and credit guarantee, the two organizations, the DIC and the CGCI, were merged and DICGC came into existence on July 15, 1978. The insurance coverage for a depositor is Rs.1,00,000. The Corporation insures all bank deposits, such as savings, fixed, current, recurring, etc. except the (i) deposits of foreign

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governments; (ii) deposits of Central/ State Governments; (iii) deposits of State Land Development Banks with the State cooperative banks; (iv) inter-bank deposits; (v) deposits received outside India, and (vi) deposit specifically exempted by the Corporation with the previous approval of the Reserve Bank. The Corporation collects insurance premium from insured banks for administration of the deposit insurance system. The premiums to be paid by the insured banks are computed on the basis of their assessable deposits. Insured banks pay advance insurance premium to the Corporation semi-annually, within two months from the beginning of each financial half year based on its deposits as at the end of previous half year. The premium paid by the insured banks to the Corporation is required to be borne by the banks themselves and is not passed on to the depositors. For delay in payment of premium, an insured bank is liable to pay interest at the rate of 8 percent above the Bank Rate on the default amount from the beginning of the relevant half-year till the date of payment (DICGCI 2006). Sri Lanka

Sri Lanka launched a Deposit Insurance-Scheme, the Sri Lanka Deposit Insurance Scheme (SLDIS), with an initial capital of Rs 1.1 billion contributed by the Central Bank of Sri Lanka to safeguard depositors in the case of a collapse of a bank or a financial firm. Under the scheme, each eligible deposit will be levied a premium of 0.10% to 0.15% per annum, which has to be borne by the Bank or the financial institution. The scheme is mainly aimed at giving a protection to the deposits of the general public. However deposit accounts of member banks and finance companies, the shareholders and directors of such institutions, etc. will not be eligible for this scheme. If the Central Bank suspends or cancels the license of a bank or a financial institution operating under its purview, each depositor will be compensated up to a maximum of Rs.200,000. The scheme will be operated by the Monetary Board of the Central Bank. Although the premium was entitled from October 2, 2010, the liability would be allowed after January 1, 2012. The Deposit Insurance Fund (DIF) is separate from the Central Bank and its liability is limited to level of fund balance and the DIF will be audited by the Auditor General of the country (Dailynews 2010). Afghanistan

In response to the recent worldwide financial crisis, Afghanistan has introduced a deposit insurance system in 2010 through establishing Afghan Deposit Insurance Corporation (ADIC) to ensure the smooth functioning of the


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financial sector. The ADIC and Da Afghanistan Bank have decided to collect deposit insurance membership fee and premium from the banks. Initially, the fund has been created with the contributions from the Afghanistan Government amounting to USD 20 million, Da Afghanistan Bank amounting to USD 4 million, commercial banks USD 1 million, donors USD 5 million. All the commercial banks including foreign bank and microfinance institutions that operate in the territory of Islamic Republic of Afghanistan are required to be a member of the corporation. The members are required to pay risk based (according to their CAMELS rating) premiums at the rate ranging from 0.25% - 0.35% of total deposit at the end of each quarter. The coverage of the insurance is up to AF 100,000 per depositor per member institution and the limit includes both the principal amount of deposit and the interest. In case of any bank failure, the ADIC will compensate the insured depositors within three months and in case of any shortfall in the fund the ADIC can raise fund from the government (http://adic.gov.af/). Pakistan

A Deposit Protection Fund (DPF) is proposed to be established under the State Bank of Pakistan (SBP), making the membership of the fund compulsory for all commercial banks, and the coverage of the fund is up to Pakistani Rupees 100,000 (which covers around 94% of total deposits), and the premium is at a flat rate basis of 0.02%. The operations of the fund shall vest with the board which shall consist of the following five members: (a) a SBP deputy governor nominated by the SBP; (b) Three members appointed by the SBP central board, and (c) managing director. DPF will be a fully owned corporation of the State Bank of Pakistan (http://www.sbp.org.pk). 5.

DIS in Bangladesh: Some Issues and Observations

Financial sector of Bangladesh is dominated by the banking sector. The recent turmoil of capital market emphasizes the importance of the banking sector’s stability and thus, it requires multilayer protective mechanism; deposit insurance system is one of them. However, the appropriate policy mix with regard to the different issues of DIS needs to be looked at closely in order to get more pragmatic approach dealing with the system. Some of the issues are discussed hereunder. 1. The banking sector of Bangladesh has never experienced any exit since independence. Legal framework of the country provides BB and/or the government with substantial power to suspend banks’ licenses,

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businesses, and wind up banks. But all those relevant provisions of the Bank Company Act, 1991 have never been practiced or it was not required to do so. That is not to mean that all the banks in our country were in good shape at all times. In fact, the regulators traditionally prefer to rehabilitate an insolvent bank rather than going for harder measures of resolution. As such, the policy of implicit guarantee reduces the necessity of explicit deposit insurance system. 2. One benefit of DIS is to increase public confidence by giving them assurance of their deposit. But, all that depends on the level of awareness or knowledge of the depositors about the DIS. As it is evident that there is large scale ignorance among the depositors with regard to the deposit insurance system, one may raise the question about the marginal contribution of DIS in improving trust of the depositors over the banking industry. 3. The moral hazard problem involved in deposit insurance system is not a big issue in Bangladesh. Depositors do not think about the coverage scheme; rather having trust on Government and Bangladesh Bank are the key elements to well-rooted public confidence over the banking sector. So, moral hazard, even if the level is high, is not because of the existence of DIS. 4. A large part of our banking sector is still owned by the Government that automatically gives the depositors some kind of implicit guarantee. In this context, it can be argued that DIS does not add value for state owned commercial banks. 5. The explicit rules of the deposit insurance system provide some sort of assurance about the resolution process of failed banks which can be extremely important for maintaining stability during financial crisis. However, in our country, some key decisive points at the time of resolution such as timing of payment, mode of payment (cash or kind) are not mentioned in the statute. 6. Setting premium rate considering the riskiness of a bank is desirable as it forces the bank management to run the business prudently. But, variable rate requires an assessment of the risk profile of banks. Risk based supervision is thus necessary for linking it with the premium rate of DIS.


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6. Conclusion

Smooth functioning of the financial system depends on a number of factors such as a set of prudential norms supported by the appropriate legal framework, lender of last resort facility, deposit insurance system, etc. The basic objective of DIS is to avoid bank runs by small, uninformed depositors by protecting their deposits. The explicit deposit insurance system was introduced in the USA in the 1930s - a period marked by severe banking crisis as a result of the Great Depression. Most of the Asian countries adopted deposit insurance scheme during the 1960s and 1970s. Deposit insurance system is designed to eliminate the risk of losing deposit with a bank as it offers protection to, at least, the small savers in line with the public policy goal of ensuring social justice. DIS maintains the stability and smooth functioning of the economy by reducing the possibility of panic among the depositors, improving risk management capacity of banks resulting from risk based premium , providing arrangement for winding up of the failing institution and establishing an exit path. Although deposit insurance system, being an integral part of the financial safety network programs contributes a lot towards the promotion of stability and economic growth, it involves a number of inherent problems such as moral hazard, reluctance to innovation, impairment of market discipline. Above all, DIS helps minimize the systemic risk but is unable to mitigate catastrophic loss. In Bangladesh, deposit insurance was launched in 1984. The deposit insurance system in Bangladesh covers a significant share of the insured deposits. Roughly more than eighty five percent depositors are fully insured, which indicates a comprehensive safety net for small depositors, who make up the vast majority of total depositors. Looking at the desirability of DIS in Bangladesh it is evident that the contribution of DIS in financial stability is not tested because of Government’s forbearance regarding weaknesses in the bank performance as well as lack of awareness on the part of the depositors. So, the degree of moral hazard arising from DIS, if any, is not acute in our banking sector. However, it is desirable to have more risk focused premium for the banks. There is also scope for bringing non-banking financial institutions under the coverage of DIS, increasing the amount of coverage, allowing the problem banks to exit from the market, introducing risk based supervision.

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REFERENCES Bangladesh Bank (2010), Financial Stability Report 2010. BCBS and IADI (2009), Core Principles for Effective Deposit Insurance Systems, Basel Committee on Banking Supervision (BCBS), International Association of Deposit Insurers (IADI). Cull, R., L. Senbet and M. Sorge (2005), “Deposit Insurance and Financial Development”, Journal of Money, Credit and Banking, Vol. 37, pp. 43-82. Dailynews (2010), www.dailynews.lk/2010/10/02/bus01.asp. Demirguc-Kunt, A., Baybars Karacoavali and Luc Laeven (2005), “Deposit Insurance Around the World: A Comprehensive Database”, World Bank Policy Research Working Paper. Demirguc-Kunt, A. and Edward Kane (2002), "Deposit Insurance Around the World: Where Does it Work?” Journal of Economic Perspectives, Vol. 16, pp. 175-195. Demirguc-Kunt, A. and Enrica Detragiache (2002), "Does Deposit Insurance Increase Banking System Stability", IMF Working Paper. Demirguc-Kunt, A. and H. Huizinga (2004) "Deposit Insurance and Market Discipline", Journal of Monetary Economics, Vol 51(2), March. DICGCI (2006), A Guide To The Deposit Insurance System Deposit Insurance and Credit Guarantee Corporation of India, Deposit Insurance and Credit Guarantee Corporation of India (DICGCI), March (Website: www.dicgc.org.in). Feyen, E. and Dimitri Vittas (2009), “Blanket Guarantees: Necessary during the Crisis, but What Next?” Crises Response, the World Bank Group, Note No. 4, Washington D.C.: The World Bank. The Daily Star (2010), National Daily, February 21. Vinals, J. and Anoop Singh (2010), "Bangladesh: Financial System Stability Assessment ", IMF Working Paper. Walker, David K. (2007), "Deposit Insurance in Selected Asian Countries: Before and After the Financial Crisis", Philippine Deposit Insurance Corporation (PDIC), PDIC Occasional Paper No. 2. (http://adic.gov.af/). (http://www.sbp.org.pk).