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FM Sitharaman Says the New DICGC Bill Will Benefit Depositors of PMC and Other Scam-Hit Banks


FM Sitharaman Says the New DICGC Bill Will Benefit Depositors of PMC and Other Scam-Hit Banks
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Finance Minister Nirmala Sitharaman said that the amendments to the Deposit Insurance Credit Guarantee Corporation (DICGC) Act will benefit depositors of non-performing banks such as Punjab and Maharashtra Cooperative (PMC) Bank and others. The amendments allow depositors to withdraw up to ₹5 lakh within the next 90 days, Sitharaman said. 

“(DICGC) Bill is effective from now, but PMC Bank, Guru Raghavendra Bank that are already under stress but which are not under moratorium, which may have administrator sitting and sorting the business out, even their depositors will benefit and get ₹5 lakh within 90 days,” the Finance Minister said. 

ReadUnion Finance Ministry: Amendments To The DICGC Act Will Apply To PMC Bank Customers

“We want to make sure within 90 days depositors get the money so that small depositors who make up 98 per cent of all depositors will get their money in time,” Sitharaman added while tabling the bill in Lok Sabha.

As per the DICGC (Amendment) Bill, 2021 that was passed in the Lok Sabha today, the DICGC will pay depositors of affected banks an insured amount of ₹5 lakh. This process will begin as soon as the bank in question is put under a moratorium. The lender is then required to prepare a list showing the outstanding deposits of every depositor within 45 days. 

The DICGC will have up to 30 days after receiving this list to authenticate the information on it. The body will also be tasked with understanding the eagerness of the depositor to get the money back from his/her account in the bank. The newly passed DICGC Bill states that the entire process should not take more than 90 days after the moratorium is announced on a bank or lender. 

A further amendment to Section 15 of the DICGC Act as noted by Business Standard, allows the DICGC to increase the cap on the premium paid by the banks to the corporation. The premium has been upped to 15 paise per annum for deposits worth ₹100. This amendment will require approval from the Reserve Bank of India (RBI).

Also readPMC Bank Depositors Will Move Bombay HC Looking For An Early Return Of Deposits

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