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Economic Survey 2022 | Rs 1,500 crore paid to 1.2 lakh depositors after DICGC Act changes

The Budget 2020- 21 had increased the deposit insurance cover from to Rs 5 lakh from Rs 1 lakh per depositor per bank

January 31, 2022 / 01:58 PM IST

More than 1.2 lakh depositors were paid over Rs 1, 500 crore as of early January 2022 under the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, the Economic Survey 2022 released on January 31 said.

Passed by Parliament in 2021, the DICGC Act changed the landscape of deposit insurance in India. It enabled the depositors of stressed banks to get up to Rs 5 lakh under the scheme as against the earlier limit of Rs 1 lakh.

The deposit insurance coverage that began with Rs 1,500 in 1961 was raised gradually to Rs 1 lakh in 1993 and remained unchanged till 2020.

The deposit insurance cover was increased from Rs 1 lakh to Rs 5 lakh per depositor per bank in the Budget 2020- 21.

Also read: Economic Survey 2022: Banking system past the pandemic but some lagged impact remains in the pipeline

DICGC has to make an interim payment be depositors of banks that face restrictions or are brought under moratorium by the RBI, resulting in restrictions on depositors from accessing their savings, the act says.

It also sets out a timeline of a maximum of 90 days for an interim payment. Within the first 45 days, the insured bank must furnish the details of all outstanding deposits to the Corporation.

Follow our live blog for the latest on the Economic Survey 2022

Within 30 days of getting the details, the Corporation has to verify the authenticity of the claims and within 15 days of the verification, payment has to be made.

Finance Minister Nirmala Sitharaman tabled the Economic Survey 2022 in the Lok Sabha ahead of the Budget 2022 on February 1. The Indian economy is estimated to grow by 9.2 percent in real terms in 2021-22 (as per the First Advance Estimates), after a contraction of 7.3 percent in 2020-21.

Dinesh Unnikrishnan
Dinesh Unnikrishnan is Deputy Editor at Moneycontrol. Dinesh heads the Banking and Finance Bureau at Moneycontrol. He also writes a weekly column, Banking Central, every Monday.
first published: Jan 31, 2022 01:52 pm