Following are the frequently asked questions.
Deposit & Credit Guarantee Fund was established in B.S. 2031 Ashoj 4 in Nepal.
Deposit Guarantee program was started in B.S. 2067 in Nepal.
The current limit of Deposit guarantee in Nepal is Rs 5 lakhs.
Money that is kept at a bank, for example in a savings account, is called a deposit. The business model of most banks is to lend out this money to other customers, keeping only a portion of it available for people wanting to withdraw money. To make sure that a large portion of these deposits is safe even if a bank fails, banks pay into an insurance fund known as a deposit guarantee scheme. This is important to preserve trust in the banking system and dissuade people from all seeking to withdraw their savings simultaneously at times of stress.
A credit guarantee scheme provides third-party credit risk mitigation to lenders through the absorption of a portion of the lender’s losses on the loans made to SMEs in case of default, typically in return for a fee.