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The Union Cabinet today approved the much-anticipated amendment to the Deposit Insurance and Credit Guarantee Corporation Act that ensures you get upto Rs. 5 lakh of your fixed deposits and savings accounts within 90 days even if the bank comes under RBI moratorium.
The Rs. 5 lakh limit is for your deposits in each bank and not in total. This means that if you have saving accounts and fixed deposits in 2-3 banks, then each of them will be insured for upto Rs. 5 lakh.
The insurance was earlier available only when the bank’s license was cancelled and its assets went into liquidation.
Though the amendment will have to pass the Parliament vote, it will likely be a positive one in favour of the Bill becoming an Act.
Finance Minister Nirmala Sitharaman said, “As per the bill approved by Cabinet, each depositor’s bank deposit is insured upto Rs 5 lakh in each bank for both principal and interest. Increase of insured amount from Rs 1 lakh to Rs 5 lakh will cover 98.3% of all deposit accounts and 50.9% of deposit value.”
