Winning Bizness Desk

Mumbai. The banks have been in the news for wrong reasons, giving customers sometimes sleepless nights or getting upset. Suppose if the bank in which you have deposited money sinks, then how much money will you get back. According to the rule that was there a year ago, you used to get a maximum of one lakh rupees if the bank sink. To change this rule, in the Union Budget 2021, Finance Minister Nirmala Sitharaman proposed to amend the Deposit Insurance and Credit Guarantee Corporation Act (DICGC). After this the law changed and the limit of sum insured was increased from Rs 1 lakh to Rs 5 lakh. After about 28 years, the limit of this sum insured was increased. Actually, Deposit Insurance is a kind of scheme, under which, after the failure of a bank, the maximum of Rs 5 lakh of the customers remains safe.

What changed

After this change, depositors will not have to wait for the bank to go through the liquidation process, only then they can claim their deposit amount. If a bank is also in the Moratorium, then the depositor can claim his amount under the DICGC Act. In other language, it means that the new amendment will provide relief to thousands of depositors of those banks, which stay in the moratorium for a long time.

How much back on deposit

Under the provisions of section 16(1) of the DICGC Act, 1961, if a bank sinks or becomes insolvent, the DICGC is liable to pay every depositor. His deposit amount will be insured up to Rs 5 lakh. If you have an account in multiple branches of the same bank, then the deposit amount and interest will be added to all the accounts and only deposits up to 5 lakh will be considered safe. In this, both the principal and interest are included. It is clear that if both are more than 5 lakhs, then only 5 lakhs will be considered safe.