Now you can withdraw up to ₹5 Lakh from an ailing bank within 90 days

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“You will get your money on the 91st or 95th day after the bank is placed under moratorium,” finance minister Nirmala Sitharaman said. 

The Central Government passed the Deposit Insurance and Credit Guarantee Corporation Bill 2021 on Wednesday. It allows customers of financial institutions under moratorium to receive insurance payout of up to Rs 5 lakh within 90 days, said the finance minister Nirmala Sitharaman.

Key Highlights

All financial institutions, including units of international banks functioning in India, would be subject to this regulation, which will also apply to institutions that are now subject to a moratorium, added the finance minister.

“We’re not going back in time. However, banks that are currently subject to a moratorium will be affected. And this will be the procedure in the future “, during the media briefing, Sitharaman stated.

“You will get your money on the 91st or 95th day after the bank is placed under moratorium,” finance minister Nirmala Sitharaman said, adding that the new regulations will not wait for the bank’s final liquidation or resolution.

The deposit insurance sum per each depositor was doubled from 1 lakh to 5 lakh last year. Yet, getting money after a bank goes bankrupt continued to be a challenge.

In her address for Budget 2021, the finance minister noted that the government was working on modifying the Deposit Insurance and Credit Guarantee Corporation Act (DICGC) 1961, which would allow depositors to access their funds in a timely and straightforward way.

Depositors in PMC banks are yet to receive their insurance funds; therefore, the procedure of retrieving the funds might take 7-8 years.

The Reserve Bank of India imposed a moratorium on Punjab and Maharashtra Cooperative Bank in 2019. Following the fall of PMC Bank, Yes Bank and Lakshmi Vilas Bank also failed, putting thousands of depositors in jeopardy.

Sitharaman’s media briefing came a day after the International Monetary Fund (IMF) downgraded India’s growth forecast for FY22 to 9.5 per cent from 12.5 per cent earlier this year.

The IMF has reduced its forecast because of a “lack of vaccination”. 

Finance Minister Nirmala Sitharaman, I&B Minister Anurag Thakur, and Minister of State L Murugan spoke during the media briefing conducted by the Union Cabinet in New Delhi on Wednesday.

S N NIMISHA
S N NIMISHA
A passionate writer who loves to juggle words and create impressive and thoughtful passages. An aspiring content/ copywriter who is willing to take any amount of hard work to achieve her goals in life. Responsible for providing original and reliable content to the audience. Tries the best in creating engaging content for any topic. Believes that any writing can be made perfect with the right usage of grammar and punctuation. Always having the zest to give the best output possible. Always accountable for her mistakes and is open to constructive criticisms. An explorer of the self and the world; Always a learner!

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