Kathmandu. The Government of India is preparing to increase the limit of insurance on bank deposits from Rs 5 00,000 to Rs 1 million in the next six months.
A senior finance ministry official said the matter was under discussion. However, a final decision has not yet been made on what the new limit will be.
According to the official, several aspects are being considered while deciding the new boundary. For example, how many account holders will be covered, how much money will be insured and how much guarantee will be given by the government. This will be announced by the Ministry of Finance after the cabinet’s decision.
In fact, under the Deposit Insurance and Credit Guarantee Corporation Act (DICGC), the government provides deposit insurance of Rs 5 lakh to customers in case of bank closure or sinking. Depositors receive this amount within 90 days.
This limit was last raised five years ago. Deposit insurance was introduced in India in 1962. At that time, the limit per account holder was Rs 1,500. It was increased from time to time. It was increased to Rs 20,000 in 1976, Rs 30,000 in 1980 and Rs 100,000 in 1993.
After the Punjab and Maharashtra Cooperative Bank crisis, it was increased to Rs 5 lakh in February 2020.
In India, if the bank is turned upside down, the account holder gets a refund of a certain amount of money from the amount deposited by him. In February 2025, the Reserve Bank of India took strict action against the new India Cooperative Bank. Since then, discussions on increasing bank deposit insurance have intensified.
