‘Only up to Rs 1 lakh, not all money, insured in banks’

Mumbai: Depositors in failed and liquidated banks will get only up to Rs 1 lakh as insurance cover, regardless of the amount in their accounts, according to the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the Reserve Bank of India.

This covers savings, fixed, current and recurring accounts, the DICGC, which insures all bank deposits, said in response to a Right to Information (RTI) query filed said.

"Under the provisions of Section 16 (1) of the DICGC Act, 1961, if a bank fails/gets liquidated, the DICGC is liable to pay to each depositor through the liquidator, the amount of his deposit up to Rs one lakh as insurance cover, for both principal and interest amount held by him in the same right and same capacity at all the branches of a bank taken together," it said.

Asked whether there is any proposal or move under consideration to raise the limit of Rs 1 lakh insured in the bank in wake of the recent PMC Bank fraud, the DICGC said, "The corporation does not have the requisite information."

The corporation covers all commercial banks, including branches of foreign banks functioning in India, local area banks and regional rural banks.

All eligible cooperative banks as defined in Section 2(gg) of the DICGC Act are also covered by the deposit insurance scheme.

"Each depositor in a bank is insured up to a maximum of Rs one lakh as on the date of liquidation/cancellation of bank's license or the date on which the scheme of amalgamation/merger/reconstruction comes into force," the DICGC said.

(For all the latest News, Mumbai, Entertainment, Cricket, Business and Featured News updates, visit Free Press Journal. Also, follow us on Twitter and Instagram and do like our Facebook page for continuous updates on the go)

Free Press Journal

www.freepressjournal.in