The Centre is thinking to increase Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance cover above ₹5 lakh, reported PTI citing Finance Ministry official on Monday. This may provide better protection to bank customers over their deposited money in case bank goes bankrupt.
What is DICGC?
DICGC is owned by the Reserve Bank of India and provides insurance coverage to depositors. As of now, it provides protection on bank deposits of upto ₹5 lakh to every bank account holder. If a bank goes bankrupt, the DICGC will pay maximum ₹5 lakh, including interest and principal, to account holders.
What is the need to increase limit of DICGC?
Recently, a bank – New India Cooperative Bank has failed in India. Customers are in worry whether their hard earned money will be returned to them or not. Customers are crowding the branches of this Bank to get their money back. Earlier also, a lot of Banks have failed in India. Banks such as PMC bank and YES Bank had failed earlier.
Thus, now the public is requesting the government to increase the limit of DICGC. Right now, if public deposits Rs.20 lakh in Bank, then also they will get only Rs.5 lac if bank fails. So, the government is thinking to increase the limit of DICGC. More details on this news will be provided soon.
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