Q: What is deposit insurance?
A: Deposit Insurance is a system that protects depositors, whether individuals or businesses, against the loss of their insured deposits in the unlikely event of a member bank failure. The deposit insurance system in Malaysia is administered by PIDM.
Q: Which banks are member institutions of PIDM?
A: All commercial banks licensed under the Banking and Financial Institutions Act 1989 and all Islamic banks licensed under the Islamic Banking Act 1983, including foreign banks operating in Malaysia, are member institutions of PIDM. Membership is compulsory as provided under Akta Perbadanan Insurans Deposit Malaysia.
Commercial and Islamic banks which are member institutions of PIDM are referred to as ‘member banks’. Look out for this membership sign at all the entrances of your bank’s branches.
Q: Must I apply or register for deposit insurance protection?
A: No, you do not need to apply or register for protection. Deposit insurance is provided automatically for eligible deposit accounts.
Q: What is the deposit insurance limit?
A: Your eligible deposits are protected up to RM250,000 per depositor per member bank. The RM250,000 limit includes both the principal amount of a deposit and the interest/return.
Q: What about the uninsured portion of the deposits?
A: Depositors may file a claim with the liquidator of the member institution to recover any amount above the insured amount.
Q: Can I buy additional insurance for my deposits if they are more than RM250,000?
A: No. Deposit insurance is not a general or life insurance product. It is provided by the Government through PIDM.
Q: What types of deposits are eligible for deposit insurance?
A: Eligible deposits include current and savings deposit accounts, fixed deposits and foreign currency deposits.
Q: What types of deposits are NOT protected?
A: Deposits not payable in Malaysia, interbank money market placements, negotiable instruments of deposit (NIDs), other bearer deposits and repurchase agreements are not protected by PIDM.
Q: Are unit trusts eligible for deposit insurance protection?
A: No. Unit trusts are not eligible for deposit insurance protection.
Q: How will I know if my deposits are eligible for deposit insurance protection?
A: Your member bank must inform you whether a deposit product is eligible or not for deposit insurance protection before you place your funds with it. All eligible deposit products are listed in a register available at your bank.
These requirements are in line with the Malaysia Deposit Insurance Corporation (Provision of Information on Deposit Insurance) Regulations 2011 to ensure member banks provide
accurate, relevant and timely information on deposit insurance protection and scope of coverage.
Q: Are Islamic and conventional deposits protected separately?
A: Yes. Islamic and conventional deposits are eligible for a separate RM250,000 deposit insurance limit per depositor per member bank.
Q: I have deposits in several member banks. Will all my deposits be added up for deposit insurance protection purposes?
A: No. Your deposits in different member banks are protected separately. The RM250,000 deposit insurance limit is applicable per depositor per member bank.
Q: I have deposits in different branches of the same member bank. Will all my deposits be protected separately?
A: No. Deposits held in different branches of the same member bank will be added together for deposit insurance protection purposes.
Q: Are there any accounts that are protected separately?
A:
- Joint accounts – Joint accounts enjoy separate deposit insurance protection provided the records of the member bank disclose the names of the joint account holders.
- Trust accounts – For trust accounts, beneficiaries can enjoy separate protection if the trustee discloses the interest of each beneficiary and the amounts owed to each beneficiary on the records of the member bank. Each beneficiary is protected up to RM250,000 separately from insured deposits held in their names.
- Accounts of sole proprietorships, partnerships or persons carrying on professional practices (e.g. architects, dentists) – These accounts are also separately protected up to the RM250,000 limit.
An example of how separate deposit insurance protection would be applied for a depositor holding several accounts in a member bank is provided here:
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Depositor
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Type of deposit
|
Amount (RM)
|
Insured (RM)
|
|
Ahmad
|
Savings
|
300,000
|
250,000
|
|
Ahmad and wife
|
Current
|
300,000
|
250,000
|
|
Ahmad, wife and daughter
|
Savings
|
250,000
|
250,000
|
|
Ahmad, Leong & Co. (legal firm)
|
Current
|
200,000
|
200,000
|
|
Ahmad & Ali Sdn. Bhd.
|
Current
|
50,000
|
50,000
|
|
Total deposits
|
1,100,000
|
|
|
Total deposits protected in aggregate
|
|
1,000,000
|
Q: Now that foreign currency deposits also enjoy deposit insurance coverage, are they separately protected from Ringgit deposits?
A: No. Unlike Islamic and conventional deposits, Ringgit and foreign currency deposits are not separately protected if they are placed in the same bank. Foreign currency deposits will be converted to Ringgit and aggregated with other deposits (e.g. savings, current and fixed deposits) for protection of up to RM250,000.
Q: What happens to my deposits if two member banks merge?
A: You will continue to enjoy separate deposit insurance coverage for a period of two years or upon maturity or until withdrawal of the deposit, whichever is earlier.
Q: In the unlikely event of a member bank failure, how do I make a deposit insurance claim?
A: You do not need to make a claim. PIDM will announce how, where and when it will reimburse insured deposits. PIDM will base its reimbursement on the depositor records of the member bank.
Q: I am a non-resident of Malaysia. Are my deposits protected?
A: Your place of residence or nationality does not affect deposit insurance protection. Deposits placed with a member bank of PIDM is protected up to RM250,000 per depositor per member bank.
Q: Are deposits in branches and subsidiaries of domestic banks outside Malaysia protected?
A: No, PIDM does not protect deposits held in these institutions. However, these may be protected by the host country’s deposit insurance or protection scheme.
Q: Who do I contact for further information?
A: Call PIDM's toll-free information line: 1-800-88-1266, available Mondays to Fridays from 8.30 am to 5.30 pm or email to: info@pidm.gov.my.
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