Deposit insurance cover to be hiked from Rs 1 lakh: Sitharaman

TIL Desk/Business/New Delhi/ Finance Minister Nirmala Sitharaman on Friday said cooperative banks would be under the RBI”s prudential norms to prevent any PMC Bank-like situations, there will be a rise from Rs 1 lakh in deposit insurance cover for account holders in the new FRDI Bill and the Finance Ministry will shortly move the proposal before the Cabinet.

“I will be going to Cabinet to increase the insurance limit from current Rs 1 lakh on deposit in banks and if the Cabinet approves it, we will move it in the upcoming winter session of Parliament”, she said at a media interaction. Sitharaman, however, did not say what would be the new deposit insurance limit.

The cover was raised from Rs 30,000 to Rs 1 lakh in 1993, and now after the collapse of Punjab & Maharashtra Co-operative Bank, there is a demand that the limit should be increased. The cooperative banks body has proposed Rs 5 lakh cover for deposits.