Customer to get 5 lac insurance within 90 days if bank under moratorium

Customer to get 5 lac insurance within 90 days if bank under moratorium

98.3% of all deposit accounts will get covered in terms of the value of the deposits. Under DICGC Act, over 50 percent will be protected.

On Wednesday, the Union Cabinet holds a press conference with Finance Minister Nirmala Sitharaman and I&B Minister Anurag Thakur and Minister of State L Murugan.

During the press briefing, the Cabinet cleared Deposit Insurance and Credit Guarantee Corporation (DICGC) Bill and Limited Liability Partnership Amendment Bill.

The Finance Minister press conference comes a day after International Monetary Fund slashed India's economic growth projection to 9.5% for FY22, down from 12.5% estimated earlier in April this year. IMF said it had revised its outlook due to the "lack of vaccine."

A multilateral MoU has been signing b/w international financial service centers and multilateral agencies, the International Organisation of Security Commissions, and International Association of Insurance Supervisors: Union Minister Anurag Thakur.

Customer to get 5 lac insurance within 90 days if bank under moratorium 1getty image

Read More: Fixed deposit rates revised: YES Bank

Limited Liability Partnership Amendment Bill cleared:

The Union Cabinet decision has today proposed the first amendment to the Limited Liability Partnership act. The act came into existence in 2008-2009.

Total of 12 offenses to make legal for LLPs. Many startups can also benefit from the ease of doing business, coming up with a new definition of all LLPs, and expanding the scope of a small LLP.

Today, you have 24 penal provisions in the LLP Act, 21 compoundable offenses, and three non-compoundable offenses. "After today penal provisions will be cut to 22, compoundable offences will be only 7, non-compoundable offences will be only 3, and the number of defaults to be dealt will be only 12," the finance minister says.

DICG Bill Act cleared:

She adds

"This clearance now, therefore, is going to give relief to all those institutions which have already come under moratorium. It is not going retrospectively back, but if your bank has already been declared under moratorium, this will cover," 

All commercial banks and even branches of foreign banks operating in India will come under the purview of this legislation. This will apply to banks at present under moratorium, says FM.

 Sitharaman says.

"On 91 or 95 day after the bank is put under suspension, you will get your money as per new rules will not have to wait for the eventual liquidation or resolution,"

Even if there's a moratorium on the bank, this measure will be setting in. The first 45 days will go for banks in distress to hand over to the insurance corporation; within 90 days process will be completed without waiting for resolution, a relief for all banks under moratorium, says FM.

Under DICGC Bill 2021, 98.3% of all deposits will get covered, and in terms of deposit value, a deposit value of 50.9% will be covered. Global deposit value is only 80% of all deposit accounts. It only covers 20-30% of deposit value: Finance Minister Nirmala Sitharaman.

Finance Minister Nirmala Sitharmaan says that the Deposit Insurance and Credit Guarantee Corporation (DICGC) has been clearing today.

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