About Rs 10,000 crores of depositors' money in the banks placed under moratorium by the central bank will be payable to eligible customers by November end under the newly notified banking Act.
The Reserve Bank of India put banks — such as Punjab & Maharashtra Co-operative (PMC) Bank, Yes Bank, Guru Raghavendra Sahakara Bank, and Lakshmi Vilas Bank, among others — under moratorium due to financial crisis. And the account-holders in such banks could not access their funds due to the moratorium.
In a bid to provide relief to the depositors of such banks, in July, the Centre introduced the Deposit Insurance & Credit Guarantee Corporation (Amendment) Bill (DICGC) 2021. Under this act, depositors of PMC Bank and Guru Raghavendra Sahakara Bank will be paid Rs 10,000 crore, The Economic Times reported.
However, the eligible account holders (of these two banks) have not been finalised yet, added the report.
What is DICGC (Amendment) Act?
Recently, the Centre introduced fresh amendments to the DICGC Act to include lenders — like Punjab & Maharashtra Co-operative (PMC) Bank — where suspension of business is already in force. The original amendment to the Act only included the banks under a moratorium.
According to the amendments made to the DICGC, account holders will be given up to Rs 5 lakh within 90 days of the bank’s collapse. As stated earlier, the amendment was introduced to provide relief to the depositors of troubled banks. Earlier, this insured amount was Rs 1 lakh.
Finance Minister Nirmala Sitharaman had said, "Normally, it takes 8-10 years after complete liquidation to get money under insurance; but now, even if there is a moratorium, within 90 days, the process will definitely be completed, giving relief to depositors."
(Edited by : Yashi Gupta)