Speaking at a function of depositors in Mumbai Mr. Gadkari said this payment has been made on the basis of claims made by the depositors of 16 urban co-operative banks which have been banned by the Reserve Bank of India. He said more than one lakh depositors had made claims, based on which, the amount has been paid in their alternate bank accounts. The Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to 5 Lakh rupees initiative of the union govt. the union minister said it is the endeavor of the government to protect the depositors when a bank fails. Under this initiative, the central government has made a provision to pay up to Rs. 5 lakh to the customers in the event of a bank sinking.
Earlier, the depositor used to get only up to Rs. 1 lakh in case of bank sinking or bankruptcy, but now the government has increased this to Rs. 5 lakh. Deposit insurance covers all types of deposits like savings, fixed, current, fixed deposits etc. in all commercial banks operating in India. State, central and primary co-operative banks operating in states/union territories have also been kept under its purview.
Based on deposit insurance coverage of Rs. 5 lakh per depositor, per bank, the number of fully secured accounts at the end of the last financial year stood at 98.1 percent of the total number of accounts as against the international standard of 80 percent. The premium of this insurance would be paid by the bank and no premium amount will be charged from the customers.
The settlement of the payment amount of this insurance will be done within 3 months. Gadkari said that the govt. is supporting RBI’s efforts to ensure that the business of the bank is transparent and the bank does not give overburden loans.
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