If the bank sinks, the amount up to five lakh will be returned in 90 days

- DICGC bill a big relief to bank account holders with Cabinet approval: Bill to be introduced in Parliament

- At present, if the bank goes bankrupt, it takes about 8 to 10 years for the account holders to receive their sum assured and other claims.

- Rs. 98.3 per cent of all accounts up to Rs 5 lakh are covered under insurance, which is 80 per cent globally.

New Delhi: Millions of ordinary depositors, who were in trouble due to bank sinking, now have to pay Rs. Compensation up to Rs 5 lakh will be given. The Union Cabinet on Wednesday approved amendments to the DICGC Act to provide relief to millions of depositors. The amendment bill will now be introduced in Parliament. In his budget speech, Finance Minister Nirmala Sitaram announced amendments to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 181.

The Union Cabinet, in a meeting on Wednesday, approved changes to the DICGC Act, under which account holders will now get compensation of up to Rs 5 lakh within 90 days under any bank sinking insurance. Millions of account holders of Punjab and Maharashtra Cooperative Bank (PMC), Lakshmi Vilas Bank and Yash Bank went bankrupt last year. As a result, the RBI and the government decided to amend the DICGC Act.

DICGC ensures that if any bank fails, its account holders get back up to a maximum of Rs 5 lakh on the amount deposited in their account. Earlier this amount was only one lakh rupees. But last year, the Modi government increased the sum insured from Rs 1 lakh to Rs 5 lakh to relieve millions of account holders from the sinking of Punjab and Maharashtra Co-operative (PMC) Bank.

Finance Minister Nirmala Sitaram was briefed on the decision taken at the cabinet meeting. A Cabinet meeting chaired by Prime Minister Narendra Modi has approved amendments to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. The Finance Ministry said the Cabinet today approved the Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021. The bill will be tabled in the monsoon session of Parliament.

This research will protect the money of account holders and investors. After the bill is passed in Parliament, account holders will get their money back within 90 days under any bank sinking insurance. He said the scope of the law would cover all commercial banks, including rural banks. Sitaram said that in India, Rs. 1 lakh to Rs. 2.5 per cent of all accounts up to Rs 5 lakh are covered under insurance. This insurance cover is about 20.5 per cent in terms of deposit value. Globally, this insurance coverage is about 50 per cent of all deposit accounts and the insurance cover is about 30 to 40 per cent in terms of deposit value.

DICGC is actually a subsidiary of the Reserve Bank of India. It provides insurance cover on the amount deposited in the bank. Under the DICGC system, the rule so far has been that the bank would insure account holders with Rs 5 lakh on their deposits. Even if the bank sinks, the account holders under the moratorium are legally entitled to recover up to Rs 5 lakh deposited in the bank, but they did not get this amount till the Reserve Bank completes the process. As a result, even if a bank sank, the account holders could not withdraw more than the limit set by the Reserve Bank, even though the money was deposited in the account, and for a long time the account holders had to struggle for their own money. The law has now been amended to alleviate this problem of the people, which will bring relief to the account holders.

Centralized step to make it easier to do business

Amendments to the LLP Act removed 12 offenses from the criminal category

As part of efforts to make it easier to do business in the country and promote the startup ecosystem, the Union Cabinet on Wednesday amended the Limited Liability Partnership (LLP) Act for the first time to remove 18 offenses from the criminal category under various provisions of the law. The Union Cabinet on Wednesday approved amendments to the LLP Act. The changes proposed under the amended law include exclusion from criminal proceedings if the provisions of the law are not complied with.

Nirmala Sitaram, who is also in charge of the Ministry of Corporate Affairs, said the approval would reduce the number of punitive provisions in the law to five while the number of cases resolved through conciliation would be reduced to seven. At the same time, the number of serious offenses will be 6 and the number of cases settled as per the order of the in-house adjudication system i.e. the adjudicating officer appointed by the Central Government will be 18.