The Union Cabinet on Wednesday is holding a press conference with Finance Minister Nirmala Sitharaman and I&B Minister Anurag Thakur and Minister of State L Murugan in New Delhi.
During the press briefing, the Cabinet cleared Deposit Insurance and Credit Guarantee Corporation (DIGC) Bill and Limited Liability Partnership Amendment Bill.
The proposed amendments will provide a solution to the biggest issue of customers having zero access to their funds for a long period till the RBI lifts the curbs on such banks. Finance Minister Nirmala Sitharaman announced that even if there is a moratorium on the bank, depositors will get their deposit insurance amount within 90 days.
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Under the DICGC, each depositor’s bank deposit is insured up to Rs 5 lakh in each bank (for both principal and interest). The increase of insured amount from Rs 1 lakh to Rs 5 lakh will cover 98.3 per cent of all deposit accounts and 50.9 per cent of deposit value, Sitharaman noted.
“Normally, it takes 8-10 years after complete liquidation to get money under insurance; but now, even if there is a moratorium, within 90 days, the process will definitely be completed, giving relief to depositors, the finance minister said.
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,” said Union Minister Anurag Thakur in the press briefing after the Cabinet meeting.
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Meanwhile, a multilateral MoU has also been signed between international financial service centres and multilateral agencies, International Organisation of Security Commissions and International Association of Insurance Supervisors.
Deposit Insurance and Credit Guarantee Corporation (DICGC) is a wholly subsidiary of the Reserve Bank of India (RBI). It provides insurance cover for bank deposit holders when the bank fails to pay its depositors.
(With IANS inputs)
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