NEW DELHI: Finance Minister Nirmala Sitharaman on Wednesday announced two Cabinet decisions that will gladden bank depositors as they will get back their money from troubled banks in 90 days and their deposits will be insured up to a maximum of Rs 5 lakh.
The increase in insurance from Rs 1 lakh to Rs 5 lakh will cover 98.3% of all deposits, she said, addressing the press briefing along with Information and Broadcasting Minister Anurg Thakur.
She said the Union Cabinet's decision to return investor's money in 90 days will also be applicable to banks currently under moratorium. "This clearance now, therefore, is going to give relief to all those institutions which have already come under moratorium. It is not going to be retrospective, but if your bank has already been declared under moratorium this will cover," she added.
Sitharaman also drew up the map on how the depositors will get back their money in 90 days. "The first 45 days will go towards the bank in distress collecting all their accounts where claims will have to be made, which will be given to proposed Deposit Insurance and Credit Guarantee Corporation (DICGC)," the Finance Minister said. The DICGC will check the accounts that are handed over and hand over the money in approximately 90 days to the depositors.
The Cabinet also cleared a Bill for DICGC which will cover 50.98% deposit value as also an amendment in the Limited Liability Partnership Act of 2008. The banks will have to now pay the deposit insurance premium at 12 paise per Re 1, which in no case can go beyond 15 paise
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