Depositors of 21 stressed cooperative banks to get Rs 5 lakh by November

The Deposit Insurance and Credit Guarantee Corporation (DICGC) will pay the depositors of 21 stressed cooperative banks, including the Punjab & Maharashtra Co-Operative Bank (PMC Bank), up to Rs 5 lakh within 90 days.

The Reserve Bank of India (RBI) had imposed restrictions on the withdrawal of deposits from these banks. Of the 21 banks, 11 are from Mahar­ashtra, five from Karnataka, and one each from Uttar Pradesh, Kerala, Rajasthan, Madhya Pradesh, and Punjab.

The DICGC in a statement said only those depositors who have submitted their willingness to the insured banks would get money. The last date to submit the declaration of willingness and update any other documents/ information to help banks to include their claims in the list is October 15.

The banks are required to submit a claim list by October 15 and update the position as on November 29 (with principal and interest). This will enable the DICGC to settle the claims and discharge its insurance liability in full in accordance with norms. The DICGC will do the verification and settlement of the claims within 45 days (November 29).

The development comes after Parliament passed the Deposit Insurance and Credit Guarantee Corporation (Ame­nd­ment) Bill, 2021, ensuring that account holders get up to Rs 5 lakh within 90 days of the RBI imposing a moratorium on banks. The government notified September 1 as the date on which the provisions of the Act would come into force. The mandated 90 days from the notified date comes to an end on November 30.

Protected accounts

The number of fully protected accounts, 2.48 billion, at the end of March constituted 98.1 per cent of the total number of accounts (253 billion), as against the international benchmark of 80 per cent.

The total insured deposits were Rs 76.21 trillion, which constituted 50.9 per cent of assessable deposits of Rs 149.7 trillion as of March end. The international benchmark is 20-30 per cent.

The number of registered insured banks stood at 2,058 as on March 31, 2021 comprising 139 commercial banks [including 6 payment banks (PBs), 10 small finance banks (SFBs), 43 regional rural banks (RRBs), two local area banks (LABs)] and 1,919 co-operative banks.