Deposit Insurance and Credit Guarantee Corporation (DICGC) has confirmed today that they have no indication of the government raising the insurance limit of Rs 1 Lakh on individual deposits in Banks.
DICGC, a wholly owned subsidiary of Reserve Bank of India was responding to the RTI query filed by a PTI journalist, seeking information on proposal to raise the insurance limit beyond Rs 1 Lakh.
Earlier in November, India’s Finance Minister Nirmala Sitharaman had talked about bringing in a legislation on raising the insurance cover on individual Bank deposits from the current bar of Rs 1 Lakh. She made this statement following a pitch by Sahakar Bharati, a non-profit with office bearers close to RSS seeking an increase of limit to Rs 5 Lakh instead of the current Rs 1 Lakh.
DICGC insures all Bank deposits and have confirmed that depositors in failed or liquidated banks will get only a cover of upto Rs 1 Lakh irrespective of their deposit volume in their accounts.
Over the years, the level of insured deposits as a percentage of assessable deposits has declined from a high of 60.5% in 2007-08 to 28.1% in 2018-19, as per DICGC data.
All eligible cooperative banks as defined in Section 2(gg) of the DICGC Act are also covered by the deposit insurance scheme.
The response assumes significance with numerous instances of different banks becoming victim of frauds, putting at risk the savings of people.
Government owned banks have reported frauds of over Rs 95,700 crore in the first six months of the current fiscal. Cooperative Banks have also been picked up for internal frauds, leading to risk on Bank deposits of people.
"According to Reserve Bank of India (RBI), frauds as per year of reporting, as reported by Public Sector Banks (PSBs), during the period from April 1, 2019 to September 30, 2019 is 5,743 involving a total amount of Rs 95,760.49 crore," Finance Minister Nirmala Sitharaman