Govt May Hike Bank Deposit Insurance to ₹10 Lakh – Secure Your Savings
Govt may hike bank deposit insurance to ₹10 lakh – Secure Your Savings with better financial protection. Learn how this move can benefit depositors.
The Indian government is reportedly considering increasing the bank deposit insurance cover from the current ₹5 lakh to ₹10 lakh starting April 1. This move aims to enhance depositor security, particularly benefiting senior citizens and small account holders.
Why is the Government Considering this Hike?
- The decision comes after recent banking crises, including the Punjab and Maharashtra Co-operative (PMC) Bank collapse and the Mumbai-based New India Government Bank issue.
- The total senior citizen deposits in Indian banks have increased from ₹13.70 lakh crore in 2018 to ₹34.20 lakh crore in 2023—a growth of 150%.
- Enhancing deposit insurance is expected to boost confidence in the banking system.
How Will This Impact Banks?
- Banks currently pay a premium of 12 paise per hundred rupees of assessable deposits to the Deposit Insurance and Credit Guarantee Corporation (DICGC).
- The government is assessing the financial burden on banks before finalizing the decision.
- In FY 2024, claims totaling ₹1432 crore were settled by DICGC, mostly related to cooperative banks.
Government’s Next Steps
- The proposal to increase the deposit insurance limit is under consideration, and a final decision is expected by the end of this month.
- Once approved, the Finance Minister will issue an official notification regarding the implementation.
- Increased deposit insurance means better protection for savings in case of bank failures.
- Senior citizens and small depositors will benefit the most from this reform.
- This move aligns with global best practices, where many countries have significantly higher deposit insurance limits.
For more updates on this issue, visit the RBI’s official website or stay tuned to trusted financial news sources.
Post Comment