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

The Narendra Modi government has brought in modifications to the Deposit Insurance Law in light of the ongoing Monsoon Session of the Parliament. Among the most important changes is the provision to give up to Rs 5 lakh to a bank account holder within 90 days if a bank is brought under an RBI-mandated moratorium for various reasons. Previously, as seen in cases such as Punjab and Maharashtra Co-operative Bank, as well as Laxmi Vilas Bank which were brought under an RBI-ordered moratorium, account holders had no recourse to their funds in the respective banks.As per the new modifications, the deposit insurance premium has been raised by 20% with immediate effect, and maximum by 50%.

Union Finance Minister Nirmala Sitharaman said the Deposit Insurance & Credit Guarantee Corporation (Amendment) Bill 2021 will be introduced in the current Parliament session. She announced the increase of Rs 5-lakh deposit insurance cover, citing that the amount will help 98.3% of all deposit accounts, and 50.9% of deposits by value. The Finance Minister added that the Bill aims to ensure that funds are disbursed within 90 days, without waiting for the liquidation of the distressed banks – a process which takes years. Watch the video to know more.