Mumbai: The federal government is “actively considering” elevating the down payment insurance policy limitation past the present Rs 5 lakh, a leading financing ministry authorities claimed on Monday.
Days after the New India Co- operative Bank fraud emerged, Department of Financial Services Secretary M Nagaraju revealed that such a proposition remains in the jobs.
“The point about increasing insurance… That is under active consideration. As and when the government approves, we will notify it,” he informed press reporters at an interview in the visibility of Finance Minister Nirmala Sitharaman.
How Does Deposit Insurance Help Depositors And Mitigate Fears In Cases Of Bank Fail
A down payment insurance policy case obtains caused when a loan provider drops, and for many years, the Deposit Insurance and Credit Guarantee Corporation (DICGC) has actually paid such cases. The body accumulates costs from financial institutions for the cover it supplies, and a bulk of the cases have actually needed to be performed in situation of participating lending institutions.
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DICGC guaranteed limitation Raised From Rs 1 Lakh To Rs 5 Lakh In 2020
It can be kept in mind that complying with the PMC Bank fraud, the DICGC guaranteed limitation was increased to Rs 5 lakh from Rs 1 lakh in 2020. The improved down payment insurance policy cover of Rs 5 lakh entered into result from February 4, 2020. Every financial institution made use of to pay 10 paise as an insurance policy costs per Rs 100 of down payment. It was increased to 12 paise per Rs 100 in 2020. It can not be greater than 15 paise at any kind of moment per Rs 100 down payment. The rise was done after a void of 27 years as it has actually been fixed given that 1993.
