These Bank Customers Are Getting Rs 5 Lakh Deposit Insurance From RBI Subsidiary: Check Your Eligibility

Diwali might have ended a while back, but customers of 16 stressed cooperative banks will be celebrating joyously the recent news. According to recent development, the customers of 1 stressed bank will get up to Rs 5 lakh deposit insurance cover on Monday. This will be facilitated by the Reserve Bank of India’s subsidiary DICGC as part of its mandate under a new law.

DICGC (amendment) bill, 2021 comes to aid of troubled customers

In August, Parliament had passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 which mandated that account holders get up to Rs 5 lakh within 90 days of the RBI imposing a moratorium on the banks.

The provisions of the Act would come into force on September 1, 2021. The mandated 90 days from the notified date comes to an end on November 29, 2021.

“The claims should be supported by officially valid documents of identity and written consent to receive the amount lying in a credit of their deposit account (willingness declaration) subject to a maximum of Rs 5 lakh along with alternate bank account details into which the said amount may be credited,” the notification read said.

It should be noted that the last date for submission of documents is December 10, 2021, while the date of payment is December 31, 2021.

The insurance amount has been increased after the gap of 27 years

Notably, the enhanced deposit insurance cover came into effect after a gap of 27 years as it has been static since 1993. Last year, 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.

As per Section 18 A (7) (a) of the Act, if a stressed bank is under the resolution process, the period for the disbursement of Rs 5 lakh can be further extended by 90 days.

Previously, every bank used to pay 10 paise as an insurance premium per Rs 100 of deposit. It was raised to 12 paise per Rs 100 in 2020. But it cannot be more than 15 paise at any point in time per Rs 100 deposit.