Deposit Insurance And Credit Guarantee Corporation Bill 2021: Deposit Insurance Payout Within 90 Days Gets Approval

Union Cabinet on July 28 cleared changes to the deposit insurance laws to provide funds up to Rs 5 lakh to an account holder within 90 days in the event of a bank coming under the moratorium imposed by the RBI. Earlier, account holders had to wait for years till the liquidation or restructuring of a distressed lender to get their deposits that are insured against default. The government has also permitted raising the deposit insurance premium by 20 per cent immediately, and maximum by 50 per cent. The premium is paid by banks to the DICGC. Centre plans to introduce the Deposit Insurance & Credit Guarantee Corporation (Amendment) Bill 2021 in the ongoing Monsoon session of Parliament. Rs 5-lakh deposit insurance cover, which was last year raised from Rs 1 lakh, will address 98.3 per cent of all deposit accounts by number, and 50.9 per cent of deposits by value, Finance Minister Nirmala Sitharaman said. Globally, deposit insurance coverage is only 80 per cent globally and it covers only 20-30 per cent of deposit value, she said. Now depositors will get insurance money within 90 days, without waiting for eventual liquidation of the distressed banks. Watch the video to know more.