As explained by the finance minister Nirmala Sitharaman last week during a press briefing, the 90-day period will be divided into two periods of 45 days. “The stressed bank is expected to collate all information regarding the number of claimants and claim amount and inform DICGC about it within the first 45 days. Within the next 45 days, DICGC is mandated to process the claim and make payment to each eligible depositor,” finance minister Nirmala Sitharaman said during the press briefing on July 28, 2021.
The overall insurance amount of Rs 5 lakh includes both principal and interest held with the bank in the same right and capacity. This move is expected to cover around 98.3% of total number of accounts and 50.9% of the value of total deposits held with the banks, the FM stated.
During a debate regarding the DICGC bill in the Rajya Sabha, it was clarified by the finance minister that PMC Bank depositors will also get benefit of this amendment.
Deposits with all banks are covered under DICGC insurance cover of Rs 5 lakh; earlier many cooperative banks were not included in this coverage. However, in 2020 the government introduced an amendment in Banking Regulation Act where RBI was given complete regulatory control over cooperative banks and all banks were put under deposit insurance coverage.
The finance minister also informed that the deposit premium that banks pay for the DICGC coverage will increase from Rs 10 paise to Rs 12 paisa per Rs 100 deposit. This means that the coverage has been raised by 5 times from Rs 1 lakh to Rs 5 lakh but the premium that banks pay has gone up only by 20%.
