Finance

RBI’s deposit insurance coverage arm to pay depositors of two co-operative banks in August

The Deposit Insurance coverage and Credit score Assure Company (DICGC) pays the eligible depositors of Shankarrao Pujari Nutan Sahakari Financial institution, Ichalkaranji, and Harihareshwar Sahakari Financial institution, Wai subsequent month. DICGC, a wholly-owned subsidiary of the RBI, supplies an insurance coverage cowl of as much as Rs 5 lakh on financial institution deposits.

Depositors of the 2 Maharashtra-based banks will get the quantity credited to the alternate checking account specified by them, or on their consent, to their Aadhaar-linked financial institution accounts. Eligible depositors of Shankarrao Pujari Nutan Sahakari Financial institution will get the fee on August 10, and people of Harihareshwar Sahakari Financial institution on August 28, in line with a DICGC round.

The Reserve Financial institution of India (RBI) had imposed a number of restrictions, together with on withdrawals by depositors, on these two banks in Could within the wake of their deteriorating monetary positions. Whereas imposing a number of restrictions on Shankarrao Pujari Nutan Sahakari Financial institution, the RBI had stated that 99.84 per cent of the depositors are absolutely lined by the DICGC insurance coverage scheme.

In case of Harihareshwar Sahakari Financial institution, 99.59 per cent are absolutely lined by the DICGC insurance coverage scheme, the RBI had stated. Deposit insurance coverage prolonged by the DICGC covers all business banks, together with native space banks and regional rural banks in addition to co-operative banks in all of the states and UTs.

As at end-March 2022, the restrict of deposit insurance coverage at Rs 5 lakh absolutely protected 256.7 crore deposit accounts (97.9 per cent of complete). In worth phrases, the insured deposits of Rs 81 lakh crore shaped 49 per cent of the entire assessable deposits.
DICGC settled combination claims of Rs 8,516.6 crore underneath completely different channels throughout 2021-22.

The entity has been extending insurance coverage cowl to depositors with the target of sustaining the arrogance of small depositors within the banking system of the nation and selling monetary stability. The Deposit Insurance coverage and Credit score Assure Company (Modification) Act, handed by Parliament in 2021, made vital modifications within the panorama of deposit insurance coverage in India.

Underneath the Act, the Company is liable to pay the insured deposit quantity to depositors of an insured financial institution. Such legal responsibility might come up when an insured financial institution undergoes liquidation, reconstruction or some other association underneath a scheme, and merger or acquisition by one other financial institution.

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