Kathmandu. India’s finance ministry is currently reviewing the possibility of increasing the insurance cover on bank deposits beyond the limit of Rs 5 lakh. If there is an agreement to increase it, then in case the bank turns upside down, the customer will get an insurance compensation of more than Rs 5 lakh on the deposit.
According to Business Today, there are indications that the revised deposit insurance scheme can be launched only by the end of the current calendar year. If the bank is bank bankrupt, deposit insurance provides security to the depositor a certain amount of bank savings.
The Finance Ministry has said that the revised insurance limit is still being analyzed. However, the government will consider the proposal deeply before making an official announcement.
Deposit Insurance and Credit Guarantee Corporation (DICGC) is responsible for managing deposit insurance. It collects premiums from banks. Which is currently fixed at 0.12 percent on Rs 100 deposit.
In India, the current insurance limit of Rs 5 lakh came into effect on April 1, 2020. This is much higher than the previous limit of Rs 1 lakh, which has remained unchanged for 27 years. This amendment has been made after the Punjab and Maharashtra Cooperative Bank crisis.
