The Union Cabinet on Wednesday took a major decision clearing the changes to the deposit insurance laws so that a sum of up to Rs. 5 lakhs shall be provided to an account holder within the time of 90 days if the moratorium is imposed on any bank by the Reserve Bank of India (RBI).
It must be noted that before this, the account holders had to wait for years to get their deposits which are insured against the default, until the liquidation or restructuring.
Along with this, the government has allowed raising the deposit insurance premium by 20% immediately, up to a maximum of 50%. The premium is paid to the DICGC by banks.
The Central government has planned to introduce the Deposit Insurance & Credit Guarantee Corporation(Amendment) Bill 2021 during the ongoing Monsoon session of the Parliament.
While this proposed law of the DICGC Bill is prospective, and retrospective, however, it will cover all the banks under the moratorium and also those that can come under the moratorium.
The DICGC in the first 45 days of being imposed with the moratorium will collect all information relating to the deposit account. And during the next 45 days, the body will review the information and pay back the depositor within a maximum time of 90 days.