The Preamble of the DICGC Act, 1961 states that it is an act to provide for the establishment of a corporation for the purpose of insurance of deposits and guarantee of credit facilities and for other matters connected therewith or incidental thereto.
New Delhi, Feb 1 (PTI) The government on Monday proposed changes in the DICGC Act to ensure depositors of troubled banks can withdraw their funds of up to Rs 5 lakh.
In the light of lenders like Punjab and Maharashtra Co-operative (PMC) Bank, Yes Bank and Lakshmi Vilas Bank running into trouble in recent times, the government had amended the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, raising the insurance cover on deposit five-fold to Rs 5 lakh.
'I shall be moving amendments to the DICGC Act, 1961 in this Session itself to streamline the provisions, so that if a bank is temporarily unable to fulfil its obligations, the depositors of such a bank can get easy and time-bound access to their deposits to the extent of the deposit insurance cover,' Finance Minister Nirmala Sitharaman said in her Budget speech.
This would help depositors of banks that are currently under stress, she added.
DICGC, a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits.
As per the current provisions, the deposit insurance of up to Rs 5 lakh comes into play when the licence of a bank is cancelled and liquidation process starts.
Meanwhile, the Reserve Bank of India (RBI) on Monday said it has cancelled the licence of Shivam Sahakari Bank, Ichalkaranji, Kolhapur, Maharashtra.
The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator for the lender, it said.
'With the cancellation of licence and commencement of liquidation proceedings, the process of paying the depositors of Shivam Sahakari Bank Ltd, Ichalkaranji, Kolhapur, Maharashtra as per the DICGC Act, 1961 will be set in motion,' RBI said.
The central bank also said that as per the data submitted by the bank, more than 99 per cent of the depositors are fully insured by DICGC.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from the DICGC, subject to provisions, it added. PTI DP NKD DP ABM
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- अगर कोई बैंक मोरेटोरियम (Bank Moratorium) में भी होता है तो डिपॉजिटर डीआईसीजीसी एक्ट (DICGC Act.) के तहत अपनी रकम क्लेम कर सकता है.
New Delhi, Feb. Feb 1 (IANS): The government will provide full security of deposits made by bank customers by carrying amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 in the current session of Parliament.
The amendment will increase the Deposit Insurance cover from Rs 1 lakh to Rs 5 lakhs for bank customers. This would mean that if a bank is temporarily unable to fulfil its obligations towards deposits, the depositors of such a bank can get easy and time-bound access to their deposits to the extent of the deposit insurance cover.
Last year, Government had approved an increase in the Deposit Insurance limit for bank customers. The amendment to the Act will now give legal cover to such insurance.
'I shall be moving amendments to the DICGC Act, 1961 in this Session itself to streamline the provisions This would help depositors of banks that are currently under stress,' finance minister Nirmala Sitharaman said in the budget speech.
The Finance Minister further said that to improve credit discipline while continuing to protect the interest of small borrowers, the minimum loan size eligible for debt recovery in the case of NBFCs is being reduced.
For NBFCs with minimum asset size of Rs 100 crores, the minimum loan size eligible for debt recovery under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 is proposed to be reduced from the existing level of Rs 50 lakhs to Rs 20 lakhs.