Big relief for Bank Account holder’s. Recently, the RBI put a stop to operations at a private bank in Maharashtra, the New India Co-operative Bank, leading to a long line of account holders outside, all eager to withdraw their money. These folks were waiting to get their deposits back, and it’s worth noting that if a bank fails or gets robbed, customers can only get back up to 5 lakh rupees, even if they have 10 lakhs in their account. But there’s some good news: in the event of a bank failure, you might soon be able to recover more than that 5 lakh limit.
The government is looking into raising the deposit insurance limit for bank deposits. If this change happens, your funds will be safer, and you could receive more than Rs 5 lakh if the bank goes under.
So, what’s going on?
Well, M. Nagaraju, the Secretary of the Financial Services Department, mentioned on Monday that the government is seriously considering increasing the current deposit insurance cap of 5 lakh rupees. This comes shortly after the New India Co-operative Bank scam was uncovered, and Nagaraju confirmed that they’re working on a proposal.
During a press conference with Finance Minister Nirmala Sitharaman, he stated that they are actively looking into raising the insurance limit and will notify the public once the government gives the green light.
What about getting your money back?
Nagaraju didn’t dive into the issues at New India Co-operative Bank, saying that the RBI is handling that situation. Deposit insurance claims kick in when a bank fails. Over the years, the Deposit Insurance and Credit Guarantee Corporation (DICGC) has been settling these claims, collecting premiums from banks for the coverage it offers, with most claims coming from co-operative banks.