FinMin, IRDAI Seek Insurance For Bank Deposits Above Rs 1 Lakh: Report
The finance ministry and IRDAI’s requests comes in the aftermath of the Punjab and Maharashtra Cooperative (PMC) Bank scam
Dec 30, 2019 / 02:18 PM IST
The finance ministry and the Insurance Regulatory and Development Authority (IRDAI) have recommended a cover for bank accounts with deposits above Rs 1 lakh, reports The Times of India.
At present, the Deposit Insurance and Credit Guarantee Corporation (DICGC) covers only deposits of Rs 1 lakh and below.
The requests from the finance ministry and the insurance regulator comes in the aftermath of the Punjab and Maharashtra Cooperative (PMC) Bank scam, estimated at Rs 6,700 crore.
Moneycontrol could not independently verify the story.
Insurers have agreed to provide the cover, but have pointed that reinsurance might be a problem, the report stated, adding DICGC is debating whether to raise the coverage to deposits over Rs 3-5 lakh from Rs 1 lakh.
The DICGC collects Re 1 for every Rs 1,000 it insures, but insurers might price it slightly higher, the report said. Insurers have made the calculation after factoring in the risk incurred in covering commercial banks, regional rural banks, cooperative banks and others.
“But this is likely a slow process as there are many amendments to be made to the Deposit Insurance and Credit Guarantee Corporation Act, 1961, before insurers can start covering this,” a source told the paper.