Modi govt’s big decision! Depositors to get coverage of up to Rs 5 lakh if bank fails
Deposit Insurance Credit Guarantee Cooperation (DICGC) insures all bank deposits, such as savings of fixed or current deposits or recurring deposits, and it covers all commercial banks, including foreign bank branches in India.
Deposit Insurance Credit Guarantee Cooperation (DICGC) insures all bank deposits, such as savings of fixed or current deposits or recurring deposits, and it covers all commercial banks, including foreign bank branches in India.
Amendment to Deposit Insurance and Credit Guarantee Corporation Act, 1961
![Amendment to Deposit Insurance and Credit Guarantee Corporation Act, 1961 Amendment to Deposit Insurance and Credit Guarantee Corporation Act, 1961](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955226-bank.jpg)
The Union Cabinet has approved amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 that will provide account holders access to up to Rs 5 lakh funds within 90 days of a bank coming under moratorium. The amendment is in line with Finance Minister Nirmala Sitharaman’s Budget speech wherein she had announced that changes will be made to the DICGC Act, 1961. The Bill is expected to be introduced in the monsoon session.
Insurance cover on deposit raised to five-fold
![Insurance cover on deposit raised to five-fold Insurance cover on deposit raised to five-fold](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955225-rupee7thpay.jpg)
Last year, the government raised insurance cover on deposit five-fold to Rs 5 lakh to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank too came under stress, leading to restructuring by the RBI and government.
Relief to thousands of depositors
![Relief to thousands of depositors Relief to thousands of depositors](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955224-bookspixabay.jpg)
Insurance when licence of a bank is cancelled
![Insurance when licence of a bank is cancelled Insurance when licence of a bank is cancelled](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955222-rupee7thpaycommission.jpg)
DICGC, a wholly-owned subsidiary of RBI
![DICGC, a wholly-owned subsidiary of RBI DICGC, a wholly-owned subsidiary of RBI](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955220-rbi.jpg)
DICGC, a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits. Deposit Insurance Credit Guarantee Cooperation (DICGC) insures all bank deposits, such as savings of fixed or current deposits or recurring deposits, and it covers all commercial banks, including foreign bank branches in India.
Insurance for both principal and interest
![Insurance for both principal and interest Insurance for both principal and interest](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955219-rupee-new.jpg)
8-10 years taken currently to get insured money
![8-10 years taken currently to get insured money 8-10 years taken currently to get insured money](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955218-bankholiday-zeenewsdhindi.jpg)
At present, it takes 8-10 years for depositors of a stressed bank to get their insured money and other claims. The first 45 days will go for the bank, which has come under stress, to collect all the accounts where the claims will have to be made, and then it will be given to this insurance company, which in real-time will check it all up, and nearer the 90th day, depositors will get the money
Enhanced deposit insurance cover of Rs 5 lakh
![Enhanced deposit insurance cover of Rs 5 lakh Enhanced deposit insurance cover of Rs 5 lakh](https://english.cdn.zeenews.com/sites/default/files/2021/07/29/955217-rupeesindianews.jpg)