The Hindu Business Line : DICGC hikes premium rates

THE Deposit Insurance and Credit Guarantee Corporation (DICGC) has announced a hike in the deposit insurance premium in its annual report for 2004-05.

The premium has been increased from eight paise per Rs 100 of assessable deposit in 2004-05 to 10 paise per Rs 100 of assessable deposits in 2005-06.

According to the report, premiums from commercial banks, including regional rural banks and local area banks in 2004-05, increased to Rs 1,211.84 crore from Rs 684.28 crore.

The premiums from co-operative banks were Rs 142.94 crore against Rs 86.35 crore. However, the claims paid out to co-operative banks amounted to Rs 440.25 crore in 2004-05.

The pressure on margins has forced DICGC to hike premiums this year.

While the aggregate amount of claims paid and provided for in respect of 27 commercial banks and 108 co-operative banks since the inception of the scheme amounted to Rs 1,484.57 crore, repayment received out of the recoveries, amounted to Rs 103.98 crore.

The recoveries accounted for seven per cent of the total claims paid.

The number of fully protected accounts increased to 61.95 crore against 51.89 crore 2003-04.

DICGC has also made a provision of Rs 1,788.52 crore towards likely claims by depositors of 113 banks that are under liquidation or whose licences have been cancelled by the Reserve Bank of India.

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