The Cabinet on Wednesday realised amendments to the Deposit Insurance Credit Guarantee Corporation (DICGC) Act, which will allow customers to have access to their securities up to Rs 5 lakh within just 90 days if their banks go failure and are put under moratorium.
The Cabinet also accepted amendments to the limited liability partnership (LLP) Act to decriminalise a dozen crimes and allow such entities to enjoy the same privileges as large companies—a conclusion that is assumed to help numbers of start-ups, among others.
Finance and corporate affairs minister Nirmala Sitharaman announced the DICGC (amendment) Bill will cover 98.3% of depositors and 50.9% of deposit value in the banking practice, way over the global level of 80% and 20-30%, respectively.
There were situations when 8-10 years related to declining until a customer of a collapsed bank could eventually lay their hands on the insured deposit amount, that too, only after the bank’s liquidation, the minister said. The Bill will be introduced in the current session of Parliament for approval, she added. It will include all types of banks, which also cover regional rural banks and cooperative banks.
FE had announced on March 15 that the government was contemplating guaranteed access to deposits in 90 days.
Once APPROVED by Parliament, the Bill will help particularly small depositors meet urgent financial exigencies.
