He told legislators on Wednesday that the scheme fund reached $374 million in March, and is expected to reach the targeted $1.3 billion as scheduled in three years. He stated that it has enhanced public confidence in placing deposits with small and medium-sized banks.

According to a survey commissioned by the Deposit Protection Board in June, 50% of respondents considered bank deposits more secure after the scheme's introduction, and 65% found greater confidence in placing deposits with small and medium banks.

Prof Chan revealed that although competition in the local banking industry is intense, the board has received no comment on, or complaint about, banks passing the cost of the scheme on to depositors.

Under the existing scheme, compensation up to a maximum of $100,000 will be paid to each eligible depositor in case of the failure of a member bank.

Prof Chan concluded by stating that the limit was determined after extensive consultation, and the board considers there is no need to adjust it.