Bank Deposits upto Rs 5 lakh to be Repaid to customer within 90 days, If Bank Sinks

Bank Deposit: Keeping in mind the interests of those depositing money in the bank, the government has approved amendments to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. see what are the benefits

Bank Deposit: The government has given great relief for those who keep money in the bank. If the bank sinks, then its customers will get the amount up to Rs 5 lakh within 90 days. Those banks will also come under the purview of this facility, on which the Reserve Bank has imposed any restriction or moratorium. In the cabinet meeting chaired by Prime Minister Narendra Modi, this decision has been taken in the interest of bank customers.

Secured amount up to Rs 5 lakh

The cabinet has approved amendments to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act for this. Under this, in case of bankruptcy or cancellation of its license, the depositor’s amount deposited in a bank is protected up to Rs 5 lakh, although the deposit amount can be more than this. Earlier this limit used to be only 1 lakh rupees, which was increased by the Modi government to 5 lakh rupees.

#Cabinet clears Deposit Insurance & Credit Guarantee Corporation Bill 2021

It insures bank deposits such as savings, FDs, current or recurring deposits. It also covers commercial, public, private sector banks & branches of foreign bank in Indiahttps://t.co/wZ5R8mZjnb

— PIB India (@PIB_India) July 28, 2021

98.3% of deposits will be covered

Regarding the decisions taken in the cabinet, Finance Minister Nirmala Sitharaman said that 98.3% of deposits will be covered under the DICGC Bill 2021. The deposit value will have a deposit cover of 50.9%. The global deposit value is 80 per cent of all deposit accounts, which cover only 20 to 30 per cent of the deposit value. Under the DICGC Act, all commercial, foreign, small, rural and corporation banks come under the ambit of deposit insurance. The Finance Minister said that within the first 45 days in the case of a bank in trouble, information about all the accounts for which claims have been made will be collected and it will be handed over to the DICGC. DICGC will scrutinize these accounts and then within the next 45 days, up to Rs 5 lakh will be returned to the depositors.

Bill will come in this monsoon session 

Finance Minister Nirmala Sitharaman said that the bill to amend the DICGC Act can be brought only in the current monsoon session. After PMC Bank, YES Bank and Lakshmi Vilas Bank came under RBI moratorium last year, depositors faced a lot of difficulty in getting their money back. In view of this, the government took a big decision last year, increasing the limit of deposit insurance to Rs 5 lakh.