Cabinet Approves Changes in Deposit Insurance Law

The Cabinet approved amendments to the deposit insurance law to ensure that the guaranteed amount of up to Rs. 5 lakhs are paid within 90 days of the Reserve Bank of India (RBI) placing a bank under moratorium.

The amendments, aimed at providing quicker relief to depositors of stressed banks, will cover lenders currently under moratorium such as the Punjab and Maharashtra Cooperative (PMC) Bank. The RBI action against PMC took place in September 2019.

“It’s not going retrospectively completely back but if your bank has already been declared under moratorium, you will also be covered by it,” finance minister Nirmala Sitharaman said at a briefing on amendments to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. S-ET

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