New Delhi: Amid the New India Co-operative Bank row, a finance ministry official on Monday said that the government is considering to increase Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance cover above Rs 5 lakh. If the government gives a green signal, it will come as a big relief for the bank bank customers over their deposited money in case the lender goes bankrupt.
On February 4, 2020, the DICGC increased the insurance coverage for depositors in all insured banks from the present level of Rs 1 lakh to Rs 5 lakhs with an aim to provide a greater measure of protection to depositors in banks.
The finance ministry official’s statement comes days after the RBI on February 13, 2025 imposed several restrictions on New India Co-operative Bank, including on withdrawal of funds by depositors, amid supervisory concerns.
“Considering the bank’s present liquidity position, the bank has been directed not to allow withdrawal of any amount from savings bank or current accounts or any other account of a depositor…,” the RBI said.
All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. It is tasked with the duty to insure all deposits of foreign Governments, deposits of central/state governments, inter-bank deposits, deposits of the State Land Development Banks with the State co-operative bank, any amount due on account of and deposit received outside India and any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.
When is DICGC liable to pay?
According to the information on RBI website, “If a bank goes into liquidation, DICGC is liable to pay to the liquidator the claim amount of each depositor upto Rupees five lakhs within two months from the date of receipt of claim list from the liquidator. The liquidator has to disburse the claim amount to each insured depositor corresponding to their claim amount.”
Amid the New India Co-operative Bank row, a finance ministry official on Monday said that the government is considering to increase DICGC insurance cover above Rs 5 lakh. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
