According to the current rule, if a bank sinks or bankruptcy or the license is canceled, customers can withdraw up to Rs 5 lakh (deposit insurance limit) from their account. But the latest news is that the government is now considering furthering this limit of Rs 5 lakh. According to PTI news, a top finance ministry official said on Monday that the government is actively considering extending the deposit insurance limit beyond the current Rs 5 lakh.
Work on the proposal is going on
According to the news, the government is now considering it a few days after the New India Co-operative Bank scam surfaced. In the presence of Finance Minister Nirmala Sitharaman, Magaraju, Secretary, Department of Financial Services, announced that such a proposal was going on. When the government approves, we will notify it. However, he refused to talk about the crisis in New India Co-operative Bank and said that RBI is considering the matter.
The limit was increased in 2020
The deposit insurance claim begins when a lender ie bank sinks. In the last few years, deposit insurance and loan guarantee corporation (DICGC) has been paying such claims. This body collects premiums from banks for the cover given by it, and most claims have to be made in terms of cooperative banks. After the PMC Bank scam, the DICGC insurance limit was increased from Rs 1 lakh to Rs 5 lakh in 2020. Economic Affairs Secretary Ajay Seth said that the cooperative banking sector is well regulated under the supervision of RBI and described the overall health of the region as strong.
What was said in the case of New India Co-operative Bank
The Secretary of Economic Affairs said that no one should doubt the entire area due to crisis in a unit. The regulator’s job is to take action against the wrong institutions. According to the report, 90 percent out of 1.3 lakh depositors of New India Co-operative Bank will be covered under DICGC. The scam in the bank was detected during a physical inspection, which revealed that cash worth Rs 122 crore shown in books was missing. Investigation revealed that the bank’s Finance General Manager Hitesh Mehta had allegedly given a large part of the embezzlement to a local builder.
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