Centre approves amends to DICGC Act | Fusion - WeRIndia

Centre approves amends to DICGC Act

Centre approves amends to DICGC Act

To provide great relief to depositors of banks, the central government amended the Deposit Insurance Credit Guarantee Corporation (DICGC) Act. The Union Cabinet approved this amendment today.

This amendment helps depositors of banks like Punjab and Maharashtra Co-operative (PMC) Bank, Yes Bank and Lakshmi Vilas Bank.

The Deposit Insurance Credit Guarantee Corporation is a subsidiary of the Reserve Bank of India (RBI). It was created to help depositors in stressed banks by providing insurance cover to them when banks fail to pay their money.

DICGC protects the money of depositors kept in all banks in India, including commercial banks, urban co-operative banks, regional rural banks, and local banks. Foreign banks located in India are also protected by it. But, all these banks must have opted for DICGC cover. All types of deposits like savings, current, recurring, and fixed deposits are covered under DICGC. The maximum limit of insurance cover per account holder is ₹5 lakhs.

In other words, each account holder can have an insurance cover up to ₹5 lakhs for all his or her deposits made in a bank.

With the new amendment, all depositors will get insurance of ₹5 lakhs within 90 days if the bank is placed under a moratorium.

At present, bank depositors are waiting till the RBI liquidises the bank to get their money deposited in it. Sometimes, RBI imposes curbs on such banks, and customers have to wait till the RBI lifts them to access their funds. But, the new amendment helps them get insurance cover on their deposits. Customers can receive it within 90 days of the bank getting placed under the moratorium.

This new amendment thus helps depositors of stressed or collapsed banks. Finance Minister Nirmala Sitharaman says that around 98 per cent of bank accounts will be protected by this law.

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