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PM address depositors in an insurance programme: Deposit Insurance payment upto Rs. 5 lakh

Legal Correspondent: Soumya Kanti Mandal

30th December, 2020: PM Narendra Modi framed the deposits of rupees 76 Lacs crore were covered by insurance under the DICGC Act, providing full insurance to around 98% of depositor’s account.

Prime Minister Narendra Modi had attended a function on depositors payment method. On insurance coverage, Where he declared insurance payment of up to rupees 5,00,000 within a specific time bound. He also said that over 1,00,000 depositors had received rupees 1300 crore. The depositors, Who were facing financial issues as their bank faced economic prices. In addition with the depositors 3,00,000 more depositors were set to claim funds thrust in such banks.

Earlier in August, the Centre had amended the Deposit Insurance and Credit Guarantee Corporation, in which the deputies can claim their funds within 90 days, if any kind of liability arises due to moratorium by the RBI.

Earlier, in an unlikely event of a bank failing in India, a account holder can claim rupees 30,000 which come after asset allocation, 1980. Later on, 1st May 1993, the DICGC had revised the amount of the insurance cover to rupees 1,00,000. From December 13, 2021, DICGC had revised the payment again and the government raised the insurance amount to rupees 5,00,000 from rupees 1,00,000.

According to the Finance Ministry,, the depositors had to wait for 8 to 10 years before they are fit for their deposits in a distressed bank only after its liquidation or instructing of her distressed lender. Now with the new amendment, the depositors can get their claim within 90 days before the liquidation of the distressed banks. The new law introduced that the first period, which is of the period of 45 days, the Bank will be put under moratorium and to the depositors account in the next spell of 45 days, the committee will review the information of the depositors relating to their accounts and repay depositors closer to the 90th day.

Issues for depositors in obtaining their claims from their banks, recent cases such as Panjab and Maharashtra Cooperative Bank ,YES Bank , Laksmi Vilas bank had put issues on the subject of deposit issue insurance, after which the government had introduced the new amendment policy.

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Normonton Residences
Jan 05

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