Mobility paves Samsung’s silver path
The Korean giant’s early bet on mobile phones helped it hit the $10-bn mark in India, but in its 25th year it ...
Amid calls for increasing the deposit insurance cover after the crisis at Punjab and Maharasthra Bank, official data show that the cap was hiked more than two decades ago, and this is, in fact, the most extended break in the revision of the cover.
The deposit insurance cover was last hiked with effect from May 1, 1993, to ₹1 lakh from ₹30,000 in July 1980. Before that, the revisions were faster – ₹20,000 from January 1976, and ₹10,000 with effect from April 1970. And before that, a cover of ₹5,000 was provided, effective January 1, 1968. According to the annual report 2018-19 of the Deposit Insurance and Credit Guarantee Corporation, the insurance cover has been revised five times.
Under Section 16 of the DICGC Act 1961, the insurance cover was originally limited to ₹1,500 only per depositor for deposits held by him in “the same capacity and in the same right” at all the branches of a bank taken together.
The Damodaran Committee on Customer Services in Banks, which was set up by the Reserve Bank of India, in its report in 2011 had recommended a five-time increase in the cap to ₹5 lakh due to rising income levels and increasing size of individual bank deposits.
It had also suggested that for sick banks, where the accounts have been frozen, there should be a way to enable the customer avail a part of their insured deposit till the final fate of a sick bank is decided.
Analysts point out that rising inflation has also impacted the value of cover. Average inflation is estimated above 6 per cent till 2014 and then at about 4 per cent. “There has been quite a significant increase in inflation over this time period. So the nominal magnitude of the cover should be increased again to protect the real value of this ₹1 lakh set in 1993,” said DK Srivastava, Chief Policy Adviser, EY India.
A move to this end was planned in the Financial Resolution and Deposit Insurance Bill, which was later junked. “It is not like the government has not been aware of the issue. It has been working on increasing the deposit insurance coverage for some time,” noted a former government official. Finance Minister Nirmala Sitharaman has indicated that the government may now look at reviewing the deposit insurance cover.
The DICGC last settled a claim in March this year, related to Uttar Pradesh-based Pioneer Urban Co-operative Bank. The RBI had cancelled the licence of the bank in October 2016. It settled main claims of 28,382 depositors for ₹6.85 crore and released ₹3.45 crore.
Last fiscal, it settled aggregate claims worth ₹37 crore for 15 cooperative banks (six main claims and 21 supplementary claims). It took an average 1,425 days in 2018-19 between de-registration of a bank and claim settlement and about 11 days between receipt of a claim and claim settlement. This was 12 days in 2017-18.
The Korean giant’s early bet on mobile phones helped it hit the $10-bn mark in India, but in its 25th year it ...
Antrix should adopt a different tactic than merely fighting over jurisdiction: Experts
Invest in relationships, enterprise, behaviour, effort and learning
From different types of osmoses to new membranes, researchers have come up with ways of drawing water
Will a stock continue its current trend or will it reverse? We tell you how you can read chart patterns to ...
₹1483 • HDFC Bank S1S2R1R2COMMENT 1465145015001510 Fresh short positions can be initiated with stop-loss at ...
Bucking the overall market trend, the stock of Capri Global Capital Limited (CGCL) gained on Monday and ...
Most AMCs have been sending out cryptic e-mails. We tell you how to read between the lines
In these isolated times when people yearn for a slice of the familiar, amateur and professional chefs are ...
On the eve of his 86th birthday, a peek into an interview-based book that reveals the actor’s many moods, ...
Forget the tuna. The island nation will keep you full and happy with coconut, koftas and jasmine
This year, on Facebook, I saw that someone had posted a list of EASY RESOLUTIONS. I didn’t copy them down but ...
Digital is becoming dominant media, but are companies and their ad agencies transforming fast enough to make a ...
Slow Network, promoted by journalist-lyricist Neelesh Misra, pushes rural products and experiences
How marketers can use the traditional exchange of festive wishes meaningfully
For Fortune, a brand celebrating its 20th anniversary, it was a rude shock to become the butt of social media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor