Bank deposit insurance cover upped from Rs 1 lakh to Rs 5 lakh, refund in 90 days: Piyush Goyal

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Union Commerce and Industry Minister Piyush Goyal on December 12 said that the government has increased the bank deposit insurance cover from Rs 1 lakh to Rs 5 lakh. The amount has to be refunded to the depositor within 90 days, he added.

"Earlier there used to be a bank deposit insurance cover of Rs 1 lakh for the deposit of the same amount or more under the 'Deposit Insurance Credit Guarantee Scheme'. It took nearly 10 years. When Prime Minister Narendra Modi was the Chief Minister of Gujarat, he had written to the then Prime Minister Manmohan Singh to extend this limit to Rs 5 lakh. The then government did not do it," new agency ANI quoted Goyal as saying.

"Now, if a person faces any problem or setback for all of his deposits in a bank, and if the bank is incapable of returning the deposit, then the depositor will get a refund of Rs 5 lakh," he added.

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Apart from this, the minister also assured that the deposited money will be refunded to the depositors within 90 days of the closure of the bank.

"The most important thing is that earlier it used to take nearly 10 years, now it has been ensured that the day on which the Reserve Bank of India decides to shut down the bank, the sum of Rs 5 lakh will be refunded to the depositors' account within 90 days of the closure of the bank," he said.

Goyal also said that the reduction in period would save loss of interest that the depositors bore during the 10 years in the earlier system. Adding more, he said,  the programme gives the largest coverage to the depositors in the world stretching up to 98 per cent of the people.

Earlier, the Parliament in August had already passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021.

The deposit insurance covers all deposits such as savings, fixed, current, recurring deposits, etc. in all commercial banks, functioning in India. Apart from this, deposits in State, Central and primary cooperative banks, functioning in States or Union Territories are also covered.

With inputs from agencies.