What is the news?
The Prime Minister has addressed a programme titled ‘Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to ₹5 Lakh’.
What did the PM say on deposit insurance?
Recently, Parliament passed the Deposit Insurance and Credit Guarantee Corporation (DICGC) Amendment Act, 2021. Under the Act, each depositor in a bank is insured upto a maximum of ₹5 lakh for both principal and interest amount.Earlier, the depositor insurance limit was ₹ 1 lakh.
Also, earlier, the liability of DICGC kicked in only when the order of liquidation was passed against a bank.
But now the account holders can access their insured deposit amount within 90 days of such a liability arising in the event of a bank coming under the moratorium imposed by the Reserve Bank of India (RBI).
Hence, this has ensured that the deposits worth Rs 76 lakh crore were insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act providing full coverage to around 98% of bank accounts.
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Source: This post is based on the article “Explained: Bank deposit insurance programme and norms to access funds” published in Indian Express on 13th December 2021.