New Delhi: PM Narendra Modi today addressed a special program on 'Depositors First Guaranteed Time-Bound Deposit Insurance Payment Up to Five Lakh' at Vigyan Bhawan in Delhi. During this period, all commercial banks operating in India have been covered under the ambit of deposit insurance like savings, fixed, current, and fixed deposits, etc. The State, Central, and Primary Cooperative Banks functioning in the States and Union Territories have also been kept under its ambit. Under the reform, the bank deposit insurance cover is said to have been increased from Rs 1 lakh to Rs 5 lakh.
5 lakh per deposit or bank, based on insurance coverage, the number of fully secured accounts was 98.1 percent of the total number of accounts by the end of the last financial year, while the international standard is 80 percent. The first part of the interim payment has recently been released by Deposit Insurance and Credit Guarantee Corporation (DICGC). The payment is based on the claims of depositors of 16 Urban Cooperative Banks which have been banned by the Reserve Bank of India.
What is bank account insurance? -On cancellation, merger, or reconstruction of bank license, every depositor has insured up to a maximum of Rs. 5 lakh for principal and interest amount. No matter how much money all your accounts are together, you will get an insurance cover of only Rs. 5 lakhs. On the other hand, this amount includes both principal and interest amounts. If your original amount is Rs. 5 lakhs if the bank fails, you will only get this amount back and not interest.
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