Big Boost for Bank Deposits: Insurance limit to Increase

The Indian government plans to raise deposit insurance for bank deposits from Rs 5 lakh to Rs 8-12 lakh by the end of February. This move aims to protect depositors and boost confidence in the banking system. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India (RBI), will administer the increased insurance cover.

The decision follows the recent fraud at New India Co-operative Bank. The RBI replaced the cooperative bank’s board and appointed an administrator. The bank cannot issue new loans or allow deposit withdrawals.

Increasing deposit insurance cover will provide greater security to depositors, especially senior citizens. It will also help maintain stability in the banking sector. The government is actively considering this proposal and an announcement is expected soon.

This move is part of the government’s efforts to safeguard bank depositors’ interests and ensure the financial system’s stability.