The problems faced by Punjab and Maharashtra Cooperative (PMC) Bank’s customers by suspending bank’s operations and restrictions on withdrawals. There is good news for bank depositors get higher protection cover after 27 years said finance minister Nirmala sitharaman announce in her budget speech last week. That the government will increase the deposit insurance to Rs 5 lakh per depositor from Rs 1 lakh at present.
This increase will result in depositors get higher protection in both fixed as well as savings deposits up to 5 lakh and covers DICGC. Whenever the bank fails to pay the money to the costumers, the DICGC is liable to pay every depositor amount.
The RBI issued directions to the Kapol Co-operative Bank on March 30, 2017, and they suspend their operations. There are other co-operative banks that are in the directions of RBI. In fact, PMC bank also runs under RBI’s directions, but after suspending operations
The depositors can withdraw Rs 50,000 from their accounts and another 50,000 in case of emergencies such as
- medical treatment,
- marriage in households, etc.
The RBI’s main intention is to revive the financial operations and then send this bank into liquidation, where the depositors will get money under DICGC. So far, this scheme is to benefit co-operative bank’s customers.
All banks, including commercial banks, have to pay the premium towards their individual DICGC cover. Currently, the premium-priced at Rs 10 to Rs 10,000 of deposit covered from April.
The demand for raising the deposit insurance coverage limit for a very long time, with the latest instance the issue had come up with the Financial Resolution and Deposit Insurance Bill.