PM to allay fears of depositors on eve of bank privatisation

Tribune News Service

New Delhi, December 11

Prime Minister Narendra Modi will address depositors at a function on Sunday at a time when confidence in security deposits has dipped after the RBI imposed restrictions on over a dozen banks, primarily from the corporate sector.

The PM’s address will also set at rest uncertainties at a time when the government is poised to privatise banks.    

The function is billed ‘Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs 5 Lakh’.

The Deposit Insurance and Credit Guarantee Corporation recently released the first tranche of interim payments against claims received from depositors of 16 Urban Cooperative Banks which are under restrictions by the RBI. Payout of over Rs 1,300 crore has been made to alternative bank accounts of over one lakh depositors against their claims, said an official press release.

Deposit insurance covers all deposits such as savings, fixed, current, recurring deposits, etc, in all commercial banks functioning in India. Deposits in state, central and primary cooperative banks, functioning in states/union territories are also covered with the Centre recently enhancing the bank deposit insurance cover to Rs 5 lakh.

“With deposit insurance coverage of Rs 5 lakh per depositor per bank, the number of fully protected accounts at end of previous financial year constituted 98.1 per cent of the total number of accounts, as against the international benchmark of 80 per cent,” added the news release.

Union Finance Minister Nirmala Sitharaman had proposed enhancement of the limit in the 2020 Union Budget and the formal clearance came in July-end this year.

Sitharaman and and RBI Governor Shaktikanta Das will also be present on the occasion.