The Union Cabinet on Wednesday approved an amendment to the DICGC Act to provide account holders access to up to Rs 5 lakh funds within 90 days of bank failure. The announcement will cover 98.3% of all deposit accounts and 50.9% of the deposit value.

The proposed legislation provides insurance to all bank deposits and covers all commercial banks. Even foreign bank branches in India will be covered under it.

   

Bank depositors to get Rs 5 Lakh insurance within 90 days in case of moratorium: FM

WHAT?

In a move that will provide relief to depositors of troubled banks, the Union Cabinet on Wednesday cleared amendments in the Deposit Insurance Credit Guarantee Corporation (DICGC) Act 1961, under which account holders of the affected bank will get up to ₹ 5 lakh within 90 days of its collapse.

WHO?

The Union Cabinet has cleared the DICGC Bill 2021, Finance Minister Nirmala Sitharaman told media persons after the cabinet meeting.

The proposed legislation provides insurance to all bank deposits and covers all commercial banks, Ms Sitharaman told reporters. She added that even foreign bank branches in India are covered under it.

MORE

The amendment to the DICGC Act, 1961 had been announced in the Union Budget by Ms Sitharaman, where she had said that an increase in insurance cover on bank deposits to ₹ 5 from ₹ 1 lakh will be made effective, in case a bank faces liquidation.