Money & Banking

New DICGC Bill will take care of PMC depositors’ woe: FM

Our Bureau New Delhi | Updated on August 04, 2021

Finance Minister Nirmala Sitharaman speaks in Rajya Sabha during the monsoon session of Parliament in New Delhi, Wednesday, August 4, 2021.   -  PTI

Aimed at protecting small depositors, the Rajya Sabha passes the new Bill.

The Rajya Sabha passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill on Wednesday. The Bill was passed without any major debate as the Opposition members were on the Well of the House demanding a discussion on the Pegasus spyware issue.

Piloting the Bill, Union Finance Minister Nirmala Sitharaman said the Bill is aimed at protecting small depositors. She also cited the example of Punjab and Maharashtra Cooperative (PMC) Bank and said the provisions in the Bill will also help the depositors in the bank. Depositors in PMC Bank have been fighting to get their deposits back as RBI imposed restrictions on the bank’s operations for about two years.

Sitharaman proposed an amendment to Section 15 to enable the Deposit Insurance and Credit Guarantee Corporation to raise the ceiling on the premium amount with the previous approval of the RBI. The Bill also has a new section 18A to enable interim payment to be made by the Corporation to depositors in those banks for whom any direction or prohibition or order or scheme under any of the provisions of the Banking Regulation Act, 1949 has been issued, imposing restrictions on depositors in the banks from accessing their deposits.

Sitharaman said the new Bill will help depositors of 23 cooperative banks which are under stress. “PMC Bank depositors will also benefit from this bill,” she said. Sitharaman, in her 2020 Budget Speech, had permitted the Corporation to increase deposit insurance coverage for a depositor from ₹1 lakh to ₹5 lakh per depositor per bank.

Published on August 04, 2021

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