New Delhi: A crucial amendment to the Deposit Insurance Credit Guarantee Corporation (DICGC) Bill 2021 has been cleared by the Union Cabinet.
It will pave the way to provide account holders an amount of up to Rs 5 lakh within 90 days of any bank failure, Union Finance Minister Nirmala Sitharaman announced on Wednesday.
The minister elaborated that DICGC Bill insures all bank deposits and covers all commercial banks, including foreign bank branches in India.
Under DICGC, every customer’s bank deposit is insured up to Rs 5 lakh (for both principal and interest). The insured amount has been increased from Rs 1 lakh to Rs 5 lakh, and will cover 98.3% of all deposit accounts and 50.9% of deposit value.
“Normally, it takes 8-10 years after complete liquidation to get money under insurance. But now, even if there is a moratorium, within 90 days, the process will definitely be completed, giving relief to depositors,” Sitharaman said.
The Centre increased insurance cover on bank deposits by five-folds last year to provide support to depositors of struggling lenders like Punjab and Maharashtra Co-operative (PMC) Bank.
After the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank also faced problems following which there was restructuring by the regulator and government.
Limited Liability Partnership (LLP) Bill amendment
The Cabinet also cleared amendments to the Limited Liability Partnership (LLP) Bill to decriminalise various provisions under the law and foster ease of doing business in India.
“With the Limited Liability Partnership Amendment Bill, we will have only 22 penal provisions, 7 compoundable offences, 3 non-compoundable offences,” Sitharaman said.