DICGC to give up to Rs 5 lakh as deposit insurance to PMC Bank depositors
Depositors of PMC Bank and 20 other stressed lenders will get up to Rs 5 lakh in the form of deposit insurance from the DICGC.
This comes after Parliament passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 which would ensure that account holders get up to Rs 5 lakh of their deposits outstanding.
In September 2019, the Reserve Bank of India (RBI) had superseded the board of PMC Bank and imposed various regulatory restrictions after financial irregularities came to light.
Later, in June this year, the banking regulator granted an in-principle approval to Centrum Financial Services and Resilient Innovations Pvt Ltd (which operates fintech startup BharatPe) to acquire the co-operative bank through a merger with a proposed small finance bank.
At present, depositors of PMC Bank continue to face restrictions and they can withdraw up to Rs 1 lakh, though this can be higher for certain medical expenses.
Last year, the government had raised the insurance cover on deposits by five times to Rs 5 lakh. This enhanced deposit insurance cover came into effect from February 4, 2020.
DICGC on Wednesday said it will pay the depositors of the insured banks placed under RBI directions (with restrictions on withdrawal of deposits), “an amount equivalent to the deposits outstanding (up to a maximum of Rs five lakh only) within a period not exceeding 90 days’’.
The RBI subsidiary added that necessary instructions have been issued to these banks to submit the claims within 45 days after obtaining the willingness of depositors to claim deposit insurance.
The verification and settlement of the claims on submission by the banks will be done within November 29, 2021.