Rs 5 lakh insurance on bank deposits: Customers to get money in 90 days if bank goes under moratorium
The proposed legislation provides insurance to all bank deposits and covers all commercial banks, Ms Sitharaman told reporters. She added that even foreign bank branches in India are covered under it.
New Delhi: In a major relief for the account holders who have deposits in the stressed banks, the government has added a layer of insurance security to safeguard their funds/deposits.
The account holders will be able to avail Rs 5 lakh fund within 90 days of any bank coming under moratorium. The depositors of these will not have to wait for the Reserve Bank of India (RBI) to rescue the bank to access their funds.
The Union Cabinet on Wednesday gave nod to the Deposit Insurance Credit Guarantee Corporation (DICGC) Bill, 2021.
Briefing the mediapersons, Finance minister Nirmala Sitharaman said, “We are not going retrospective. But banks that are presently under moratorium will come under this. And this will be the future process.”
At least 98.3% of all deposit accounts will get covered under it, in terms of value of the deposits over 50% coverage, she added.
Each depositor’s bank deposit is insured up to Rs. 5 lakh in each bank for both principal & interest.
Increase of insured amount from Rs. 1 lakh to Rs. 5 lakh will cover 98.3% of all deposit accounts and 50.9% of deposit value.
– Union Minister @nsitharaman #CabinetDecisions pic.twitter.com/4m4Hyog9tl
— MIB India ?? #Cheer4India (@MIB_India) July 28, 2021
“Deposit Insurance Credit Guarantee Corporation was created in case people faced difficulties after RBI imposes moratoriums on banks. Today’s Cabinet meeting has decided that within 90 days, depositors will receive Rs 5 lakhs of their money,” Union Minister Anurag Thakur said today.
The proposed legislation provides insurance to all bank deposits and covers all commercial banks, Ms Sitharaman told reporters. She added that even foreign bank branches in India are covered under it.