Last year, the government increased the insurance cover on the deposit amount by 5 times to Rs 5 lakh to provide assistance to depositors of Punjab and Maharashtra Co-operative Bank (PMC Bank).
Your money deposited in banks will be safer than before. To ensure timely assistance to depositors of stress banks, the government may introduce a bill amending the DICGC Act in the monsoon session. Its purpose is to secure the account holders their money under the limit of insurance cover. Last year, the government increased the insurance cover on the deposit amount by 5 times to Rs 5 lakh to provide assistance to depositors of Punjab and Maharashtra Co-operative Bank (PMC Bank).
Explain that after the ban on PMC bank, Yes Bank and Lakshmi Vilas Bank also got deteriorated, which led to restructuring by the regulator and the government.
Bill will be presented in monsoon session
Sources said that the Finance Minister had amended the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 in the budget and the bill is almost ready. Sources said that it is expected that after the review of the Union Cabinet, the bill will be introduced in the upcoming monsoon session.
After the enactment of the bill, thousands of depositors whose money is in stressed banks like PMC Bank and other small cooperative banks will get immediate relief.
What is deposit insurance
The deposits of customers are protected to an extent if a bank defaults or fails. This is called deposit insurance. Deposit insurance is a type of protection cover. It is available to the depositors of the bank. DICGC provides this insurance. It is a wholly owned company of the Reserve Bank of India (RBI).
If your total deposit in one of the banks is more than Rs 5 lakh, then you will get a cover of only Rs 5 lakh. That is, in case of drowning of the bank or cancellation of the license, the amount of up to Rs 5 lakh will be returned to the customer. Whether the amount deposited in the bank is less than 5 lakh rupees or more. Now what will happen to those who have less than 5 lakh rupees in this bank.
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