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

DICGC, a wholly owned subsidiary of RBI, offers insurance cover up to Rs 5 lakh on bank deposits

Mumbai: Deposit Insurance and Credit Guarantee Corporation (DICGC) will pay the eligible depositors of Shankarrao Pujari Nutan Sahakari Bank, Ichalkaranji, and Harihareshwar Sahakari Bank, Wai next month.
DICGC, a wholly owned subsidiary of reserve Bank of IndiaThe bank offers insurance cover on deposits up to Rs 5 lakh.
The depositors of two Maharashtra based banks will be credited in the alternate bank account specified by them or with their consent in their Aadhaar linked bank accounts.
According to a DICGC circular, eligible depositors of Shankarrao Pujari Nutan Sahakari Bank will get payment on August 10 and Harihareshwar Sahakari Bank on August 28.
The Reserve Bank of India (RBI) in May had imposed several restrictions, including withdrawals by depositors, in view of the deteriorating financial condition of these two banks.
The RBI had imposed several restrictions on Shankarrao Pujari Nutan Sahakari Bank, saying that 99.84 per cent of the depositors are fully covered under the DICGC insurance scheme.
The RBI had said that in the case of Harihareshwar Sahakari Bank, 99.59 per cent are fully covered under the DICGC insurance scheme.
The deposit insurance extended by DICGC covers all commercial banks, including local area banks and regional rural banks as well as co-operative banks in all states and union territories.
As of the end of March 2022, the deposit insurance limit is Rs 5 lakh in fully protected 256.7 crore deposit accounts (97.9 per cent of the total). In terms of value, the sum assured amount of Rs 81 lakh crore is 49 per cent of the total assessable deposits.
DICGC settled claims totaling Rs 8,516.6 crore under various channels during 2021-22.
The institution is providing insurance cover to the depositors with the objective of maintaining the confidence of small depositors in the banking system of the country and promoting financial stability.
The Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, passed by the Parliament in 2021, brought about significant changes in the landscape of deposit insurance in India.
Under the Act, the corporation is liable to pay the insured deposits to the depositors of the insured bank. Such liability may arise when an insured bank undergoes liquidation, reconstruction or any other arrangement under a scheme, and is merged or acquired by another bank.