20 November, 2019
Syllabus subtopic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
News: With the failure of the Punjab and Maharashtra Co-operative (PMC) Bank reigniting the debate on the low level of insurance for deposits held by customers in banks in India, the central government now plans to raise the cover. A legislation in this regard is likely in the ongoing Winter Session of Parliament.
Prelims focus: About Deposit Insurance and its regulation
Mains focus: The need for reforms in the banking sector
About deposit insurance an its regulation in India
What happens to depositors’ money when a bank fails?
Procedure for depositors to claim the money on bank’s liquidation
The DICGC does not deal directly with depositors.
In FY19, it took an average 1,425 days for the DICGC to receive and settle the first claims on a de-registered bank.
Who are insured by the DICGC?
The corporation covers all commercial and co-operative banks, except in Meghalaya, Chandigarh, Lakshadweep and Dadra and Nagar Haveli. Besides, Only primary cooperative societies are not insured by the DICGC.
The DICGC does not include the following types of deposits:
Source: The Hindu
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