Depositors of PMC Bank and other stressed banks to receive upto Rs 5 lakhs from Nov 30

In great relief for the depositors of stressed banks like Punjab & Maharashtra Cooperative (PMC) Bank, they are now to receive up to Rs 5 lakh of their insured money from November 30, 2021, onwards. Concerning the same, the Central government has already notified this amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. 

Stressed Bank depositors to receive up to Rs 5 lakhs

Earlier in the month of July, the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 was passed by the Parliament which ensures that the account holders will receive up to Rs 5 lakh within 90 days after RBI imposes a moratorium on the banks.

Meanwhile, the Centre has informed about September 1, 2021, being the date on which the provisions of this Act will come into force. The gazette notification was issued on August 27, 2021, providing details on it. 

The notification reads, "In exercise of the powers conferred by sub-section (2) of section 1 of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021 (30 of 2021), the Central Government hereby appoints the 1st day of September, 2021, as the date on which the provisions of the said Act shall come into force."

The Union Cabinet after giving the 90-day time limit to provide the returns to the bank holders of the stressed banks also decided to make the Limited Liability Partnership Act more business-friendly. The decision was taken to ensure that the depositors receive the amount within a stipulated time and don't have to wait endlessly.

DICGC returns on bank deposits

The Deposit Insurance and Credit Guarantee Corporation provides the depositors with a maximum of Rs 5 lakhs in case of bank liquidation. Earlier, it was 1 lakh rupees which was raised to Rs 5 lakh rupees to provide relief to the depositors of several stressed banks such as the Punjab and Maharashtra Cooperative Bank, Yes Bank, and Lakshmi Vilas Bank. 

It is a wholly-owned subsidiary of the Reserve Bank of India and provides insurance covers on deposits.

With PTI inputs

(Image: PTI)