New Delhi: In a ray of hope for depositors of stressed banks such as Punjab & Maharashtra Cooperative (PMC) Bank, customers of these lenders are now eligible for getting up to Rs 5 lakh back from November 30 this year. The development comes as the government has notified the amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, as per a PTI report.
- Earlier in August, Parliament had passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 ensuring that account holders get up to Rs 5 lakh within 90 days of the RBI imposing moratorium on the banks, as per a PTI report.
- The amount of Rs 5 lakh would be provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), PTI reported.
- The government has notified September 1, 2021 as the date on which the provisions of the Act shall come into force, according to a gazette notification dated August 27, 2021, as per PTI.
- “In exercise of the powers conferred by sub-section (2) of section 1 of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021 (30 of 2021), the Central Government hereby appoints the 1st day of September, 2021, as the date on which the provisions of the said Act shall come into force,” it said, PTI reported.
- Consequently, 90 days from the effective date is November 30, 2021 for depositors to get their funds back, as per PTI report.
- The first 45 days are meant for the bank, which has come under stress, to collect all the details of the accounts where the claims will have to be made. This will then be forwarded to the insurance company, which in real-time will check it all up, and nearer the 90th day, depositors will get the money, Finance Minister Nirmala Sitharaman said, as per PTI report.
- The benefit will also accrue to the depositors of 23 cooperative banks which are in financial stress and on which the Reserve Bank of India (RBI) has imposed certain restrictions.
- DICGC is a wholly-owned subsidiary of the RBI. It provides insurance cover on bank deposits.
- At present, it takes 8-10 years for the depositors of a stressed bank to get their insured money and other claims, as per PTI report.
- In 2020, the government increased the insurance cover on deposits by five times to Rs 5 lakh. The enhanced deposit insurance cover of Rs 5 lakh came into effect from February 4, 2020, PTI reported.
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