Parliament Amends DICGC Bill -2021

Last Updated On: Aug. 13, 2021, 11:47 p.m.
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Relief to Customers of Banks  Facing RBI Curbs

The Deposit Insurance and Credit Guarantee Corporation (DICGC) (Amendment) Bill, 2021, has been passed by Parliament. It will provide a solution to the biggest issue of bank customers who cannot access their funds if the RBI puts curbs on bank. The immediate beneficiaries of the DICGC Act amendments will be thousands of depositors of banks like PMC Bank, Yes Bank and Lakshmi Vilas Bank.

 

The main features of the bill are interim payment by DICGC to depositors in banks with restrictions or moratorium imposed by the RBI; depositors getting access to their money without waiting for years till liquidation, etc; clear-cut timeline of a maximum of 90 days provided for an interim payment to depositors; and provision to cover existing cases where banks are already under restrictions.

The bill will also ensure timely repayment to DICGC and expedite recoveries, and will enable ceiling on premium to be notified by the DICGC, with the prior approval of the RBI. After the passage of this bill, the deposit insurance coverage in India has gone up to 98.3 per cent and covered deposit value has increased to 50.9 per cent, while the corresponding figures globally are only 80 per cent and 20-30 per cent.

 

6 features of new DICGC Bill

1. Interim payment to be made by DICGC to depositors in those banks for whom any restrictions/ moratorium have been imposed by RBI under the BR Act

2. Depositors will be able to access their own money (ordinarily payable on demand) without waiting for years till liquidation, etc.

3. Clear-cut timeline of maximum of 90 days provided for interim payment t depositors

4. Provision to cover existing cases where banks are already under restrictions.

5. Enables  timely repayment to DICGC and expedites recoveries

6. Enables ceiling on premium to be notified by DICGC, with the prior approval of RBI

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