The government is actively considering raising the deposit insurance limit beyond the current Rs 5 lakh, M Nagaraju Department of Financial Services Secretary told reporters on Monday in the presence of Finance Minister Nirmala Sitharaman.
The government is actively considering raising the deposit insurance limit beyond the current Rs 5 lakh, M Nagaraju Department of Financial Services Secretary told reporters on Monday in the presence of Finance Minister Nirmala Sitharaman. (Image:DC)
Mumbai: The government is actively considering raising the deposit insurance limit beyond the current Rs 5 lakh, M Nagaraju Department of Financial Services Secretary told reporters on Monday in the presence of Finance Minister Nirmala Sitharaman.
The move come days after the Reserve Bank of India (RBI) imposed restrictions on Mumbai-based New India Co-operative Bank and superseded its Board of Directors for 12 months citing poor governance at the bank.
"The point about increasing insurance... that is under active consideration. As and when the government approves, we will notify
it," he told reporters at the post-budget press conference of Finance Minister Nirmala Sitharaman.
He, however, declined to speak on the crisis at New India Co-operative Bank, saying the RBI is seized of the matter.
In the event of liquidation, DICGC pays money to the liquidator who is responsible for paying the depositors. The body collects premiums from banks for the cover it offers. In 2020 following the PMC Bank scam, the DICGC insured limit was raised to Rs 5 lakh from Rs 1 lakh.
As per reports, 90 per cent of New India Co-Operative Bank's 1.3 lakh depositors will have their entire sums covered under the DICGC.
Meanwhile at the press conference, the Finance Minister informed the reporters that the government has asked insurers to extend the free look period for insurance policies from the current one month to one year. The free look period is the timeframe during which policyholders can cancel their policy without penalties.
The finance minister also informed that internal consultations on the Insurance Amendment Bill have been completed. However, the law will need to be amended before the bill can be introduced. She further said the government is looking at more Foreign Direct Investment (FDI) for the insurance sector.
On a question on New Tax Regime, Sitharaman said that the revised rates are more favourable. “Higher income banks have been brought into lower brackets ensuring taxpayers benefit from the reduced rates. The entire structure has been reworked to favour every taxpayer,” she said.
"The point about increasing insurance... that is under active consideration. As and when the government approves, we will notify
it," he told reporters at the post-budget press conference of Finance Minister Nirmala Sitharaman.
He, however, declined to speak on the crisis at New India Co-operative Bank, saying the RBI is seized of the matter.
In the event of liquidation, DICGC pays money to the liquidator who is responsible for paying the depositors. The body collects premiums from banks for the cover it offers. In 2020 following the PMC Bank scam, the DICGC insured limit was raised to Rs 5 lakh from Rs 1 lakh.
As per reports, 90 per cent of New India Co-Operative Bank's 1.3 lakh depositors will have their entire sums covered under the DICGC.
Meanwhile at the press conference, the Finance Minister informed the reporters that the government has asked insurers to extend the free look period for insurance policies from the current one month to one year. The free look period is the timeframe during which policyholders can cancel their policy without penalties.
The finance minister also informed that internal consultations on the Insurance Amendment Bill have been completed. However, the law will need to be amended before the bill can be introduced. She further said the government is looking at more Foreign Direct Investment (FDI) for the insurance sector.
On a question on New Tax Regime, Sitharaman said that the revised rates are more favourable. “Higher income banks have been brought into lower brackets ensuring taxpayers benefit from the reduced rates. The entire structure has been reworked to favour every taxpayer,” she said.
( Source : Deccan Chronicle )
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