Govt introduces Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill in Rajya Sabha

In addition to, it’ll additionally present that the DICGC could defer or fluctuate the receipt of repayments because of it from the insured financial institution and to empower the Company to cost penal curiosity in case of delay in reimbursement by the banks to the Company.

The federal government on Friday launched the Deposit Insurance coverage and Credit score Assure Company (Modification) Invoice within the Rajya Sabha, which goals to offer well timed assist to depositors of harassed banks.

Minister of State for Finance Bhagwat Karad launched the Invoice, which seeks to offer rapid reduction to 1000’s of depositors who’ve their cash parked in harassed lenders.

The Invoice has proposed that even when a financial institution is quickly unable to fulfil its obligations because of restrictions similar to moratorium, depositors can entry their deposits to the extent of the deposit insurance coverage cowl by interim funds by the Deposit Insurance coverage and Credit score Assure Company (DICGC). For this, the Invoice seeks to insert a brand new Part within the DICGC Act, 1961.

It additionally seeks to amend Part 15 of the DICGC Act to allow the Company to extend the ceiling on the quantity of premium, with the prior approval of the Reserve Financial institution of India (RBI).

In addition to, it’ll additionally present that the DICGC could defer or fluctuate the receipt of repayments because of it from the insured financial institution and to empower the Company to cost penal curiosity in case of delay in reimbursement by the banks to the Company.

Although the RBI and the central authorities preserve monitoring the well being of all banks, there have been quite a few current instances of banks, particularly cooperative banks, being unable to fulfil their obligations in the direction of depositors because of the imposition of moratorium by the RBI.

Earlier this week, the Union Cupboard cleared amendments to the DICGC Act.

Final 12 months, the federal government had elevated insurance coverage cowl on deposits by 5 occasions to Rs 5 lakh.