Cabinet Decisions: Big relief to depositors- up to Rs 5 lakh will be available within 90 days

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Cabinet Decisions: Big relief to depositors- up to Rs 5 lakh will be available within 90 days: If the bank sinks, now the process of getting deposits up to Rs 5 lakh will be completed within 90 days. It will also cover customers of those banks, on which RBI has imposed any restriction or moratorium. This decision was taken in the meeting of the Union Cabinet chaired by Prime Minister Narendra Modi. For this, the Cabinet has approved amendments to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. Explain that in case of bankruptcy or cancellation of its license in a bank, only the depositor’s amount deposited in it is protected up to Rs 5 lakh, irrespective of the total deposit. Earlier this limit was Rs 1 lakh, but the government has increased it to Rs 5 lakh.

After the meeting, Finance Minister Nirmala Sitharaman, while giving information about the decisions, said that now in case of bankruptcy or cancellation of its license or any restriction on it by RBI, within 90 days, the depositor will have to pay up to Rs 5 lakh. The process of getting the deposit will be completed.

The Finance Minister said that in the case of a troubled bank, within the first 45 days, the information of all the accounts for which claims have been made and it will be submitted to the DICGC. The DICGC will check these accounts and then within the next 45 days, the process of handing over the amount up to Rs 5 lakh to the depositors will be completed.

Deposits present in all branches of a bank come under the ambit

The security of the depositor’s deposits up to Rs 5 lakh in the bank is guaranteed by the Deposit Insurance Credit Guarantee Corporation. In this limit of Rs 5 lakh, a depositor has all the deposit counts present in all the branches of a bank. Every depositor’s safe deposit up to Rs 5 lakh in each bank includes both principal and interest. DICGC covers all bank deposits. It covers all banks like commercial banks, branches of foreign banks in India, small finance banks, co-operative banks, payments banks, etc.

Increase in premium on deposits

Sitharaman said that every bank actually used to have a premium of 10 paise for Rs 100 of the deposited amount. Now it is being increased to 12 paise. It should not exceed 15 paise per Rs 100 at any point of time. Further said that under the DICGC Bill 2021, 98.3% of all deposits will be covered and in terms of deposit value, 50.9% of deposit value will be covered. Global deposit value accounts for only 80% of all deposit accounts. It covers only 20-30% of the deposit value.