Will the insurance cover limit on bank deposits be Rs 50 lakh?
Is the government considering increasing the deposit insurance limit in banks keeping in mind the interests of small investors and bank account holders? Is the government going to increase the deposit insurance limit from Rs 5 lakh to Rs 50 lakh? This question was asked by Finance minister nirmala sitharaman during Question Hour in the Lok Sabha.
Lok Sabha MPs suresh Kumar Shetkar and K sudhakar asked the Finance minister during Question Hour whether the government is considering increasing this limit. Responding to this question, the Finance minister said, under Section 16(1) of the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, every depositor including savings, fixed, current and recurring deposits in banks get a deposit insurance cover of up to Rs 5 lakh, which was earlier Rs 1 lakh. It was decided to increase this limit from 4 february 2020.
The Finance minister said, the Deposit Insurance and Credit Guarantee Corporation can increase the deposit insurance cover from time to time, after taking approval from the Central government, keeping in mind its financial position and the interest of the banking system of the whole country. nirmala sitharaman said, all commercial banks, small finance banks, payment banks, regional rural banks and local area banks and all cooperative banks, state cooperative banks and district central cooperative banks come under the deposit insurance cover.
In the second week of february this year, the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india had decided to impose several restrictions on the functioning of Mumbai-based New india Co-operative bank after irregularities were found. After this decision of RBI, depositors were banned from withdrawing their hard-earned money deposited in the accounts. Since then, the demand for increasing the deposit insurance limit has intensified. In the budget too, there was a demand to provide insurance cover on deposits of more than Rs 5 lakh to provide security to the hard earned money of bank depositors. Even if the bank customers have more than Rs 5 lakh deposited in the bank including their savings account, recurring deposit or fixed deposit, in case of bank collapse, insurance cover is available only on deposits up to Rs 5 lakh.
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