´Autonomy is the next DCGC aim´

HIMALAYAN NEWS SERVICE

KATHMANDU: The sole deposit guarantor of the banks and financial institutions’ deposits is hopeful to get autonomy once the Deposits Guarantee Act 2011 gets endorsed by the Parliament. “The Act will give autonomy to the corporation,” Jagadish Chalise, general manager of Deposit Credit and Guarantee Corporation (DCGC), said, adding that it could work as a safety net for the government and financial market regulators.

Finance Ministry has already prepared a draft of Deposits Guarantee Act that is waiting to be endorsed by the Parliament. “The Act is being discussed as a priority in the Parliament,” he added. “This will not only increase the paid-up capital but also provide the corporation several authorities practised by global deposit insurers.”

“We need to strengthen our institutional capacity and upgrade,” Chalise said, adding that the corporation could also work as the liquidator in the future.

The government is contributing Rs 230 million to increase the corporation’s paid-up capital to Rs 480 million — as announced in the budget for the present fiscal year — in order to strengthen the capacity of DCGC. “Legally, DCGC had been bestowed with the right to perform deposit insurance since 1995. But in absence of any mandatory direction from the regulator and the government, none of the financial institutions came to insure their deposits with us,” he explained.

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