NEW DELHI: Even as Union Finance Minister Nirmala Sitharaman maintained that the government will table a Bill to increase the deposit insurance cover during the ongoing winter session, the Reserve Bank of India unions have requested a hike in deposit insurance cover to Rs 10 lakh.
Currently, the Deposit Insurance and Credit Guarantee Corporation insures each bank depositor up to a maximum of Rs 1 lakh for both principal and interest as on the date of liquidation or cancellation of a bank’s licence.
Earlier, Sitharaman had said that the government would bring in a legislation during the winter session to raise the deposit insurance cover from Rs 1 lakh, without specifying a figure to which it will be increased.
Finance ministry sources said this would be Rs 5 lakh.
The Reserve Bank employees’ unions on Tuesday urged the Centre to hike the bank deposit insurance cover from the present Rs 1 lakh to Rs 10 lakh.
“We had earlier suggested hiking the insured deposit cover to at least Rs 10 lakh, covering all types of deposits of an individual, which we reiterate and urge the government to consider,” the All-India Reserve Bank Employees’ Association said in a statement.
Noting that raising the coverage has been long overdue, the RBI unions noted that the Rs 1 lakh cover was set in May 1993, post which the value of rupee has eroded sharply, necessitating an immediate hike.
The demand for increasing bank deposit insurance cover, which was last revised in May 1993, has come to the fore after the ongoing crisis at Punjab & Maharashtra Cooperative Bank (PMC Bank).
The unions also demanded to bring urban co-operative banks, which have dual regulation now by the states and RBI, exclusively under the jurisdiction of the RBI.