Insurance cover also applicable to deposits in co-op banks
New Delhi: The deposit insurance coverage is also applicable to all eligible deposits in co-operative banks, Finance Minister P Chidambaram informed Rajya Sabah Thursday.
According to the existing norms of DICGC, a wholly-owned subsidiary of the RBI, a maximum of Rs 1 lakh is paid to a depositor in case a bank goes insolvent.
"In terms of the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, the deposit insurance coverage is also applicable to the eligible deposits held in all eligible co-operative banks," Chidambaram said in a written reply.
He said the government has suggested Deposit Insurance and Credit Guarantee Corporation (DICGC) and the Reserve Bank of India to adopt to risk-based deposit insurance premium structure. This will be prior to the DICGC proposal for increasing insurance coverage limit from Rs 1 lakh to to Rs 2 lakh being approved.
"DICGC has sent a proposal to increase the deposit insurance coverage limit from the existing Rs 1 lakh to Rs 2 lakh for approval of the government.
"The proposal was examined and to rationalise the deposit insurance premium structure, the government has suggested to the DICGC and the RBI to adopt to Risk-Based Deposit Insurance Premium Structure, before the proposal of the DICGC is considered for approval," Chidambaram said.