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The government can increase the limit of insurance on bank deposits from Rs 5 lakh to Rs 10 lakh in the next 6 months. A senior finance ministry official said that churning is going on about this. However, the final decision of how much the new limit will be will not be taken yet.
According to the official- Many aspects are being seen in fixing the new limit. For example, how many account holders will be covered, how much money will be insured and how much the government will give. The Finance Ministry will announce it after the cabinet decision.
In fact, under the Deposit Insurance and Credit Guarantee Corporation Act (DICGC), in the event of the bank’s closure or drowning, the customers give a deposit of Rs 5 lakh to the customers. Depositors get this amount within 90 days.
The last time limit was increased 5 years ago Deposit insurance started in the country in 1962. At that time there was a limit of Rs 1,500 per account holder. It was extended from time to time. 20 thousand rupees in 1976, 30 thousand rupees in 1980 and 1 lakh rupees in 1993. In February 2020, it was increased to Rs 5 lakh after the Punjab and Maharashtra co-operative bank crisis.
Explain that if the bank becomes bankrupt, then the account holder gets the money back to the limit fixed from its deposit. The Reserve Bank took strict action against the New India Co-operative Bank in February 2025. Since then, the discussion on increasing bank deposit insurance intensified.
How many days will you get money? If your bank is insolvency for some reason or goes to the Moretorium, then you get your deposited money in 90 days. The affected bank has to send details of account holders to DICGC in 45 days. In the next 45 days, he returns the money to the account holders.
How do you get money?
- If a bank is closed or bankrupt, DICGC first seeks the bank’s list of customers and their deposit amount.
- After this, DICGC gives the amount of insurance to the bank.
- Then the bank sends insurance money to their account based on the deposit amount of its customers.
Which banks are included under it? All commercial banks including branches of foreign banks working in India, local regional banks and regional rural banks are insured by DICGC.
How do you know that your bank comes under DICGC? While registering any bank, DICGC gives them a printed form, which contains information about the insurance received by the depositors. If a depositor needs information about this, then they can inquire about this from the bank branch officer.
What is DICGC? Deposit Insurance and Credit Guarantee Corporation is an institution owned by DICGC, Reserve Bank, which provides insurance cover on bank deposits.
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