The Union Cabinet on Wednesday approved the Deposit Insurance and Credit Guarantee Corporation Bill 2021 that proposes to provide relief to small depositors by providing guarantees on their life savings.
According to Finance Minister Nirmala Sitharaman, the bill will increase insurance amount on each depositor’s bank deposit to Rs 5 lakh in both principal and interest.
The amount guaranteed under the Act will be available to depositors of all banks and financial institutions including those sectors where the bank has gone into moratorium.
Also, the new bill will provide a time-bound process to clear the insured deposit amount. This will have to be cleared within 90 days, irrespective whether the bank is undergoing a resolution or going in for liquidation.