Depositors of PMC, 20 other stressed banks to get up to ₹5L in 90 days

Deposit Insurance and Credit Guarantee Corporation (DICGC) has released a list of 21 banks whose account holders will likely get up to Rs 5 lakh according to a statement released by it. The operations of these banks have been shut.

The functions of the DICGC are governed by the provisions of ‘The Deposit Insurance and Credit Guarantee Corporation Act, 1961’ (DICGC Act) and ‘The Deposit Insurance and Credit Guarantee Corporation General Regulations, 1961’ framed by the Reserve Bank of India in the exercise of the powers conferred by sub-section (3) of Section 50 of the said Act.

Necessary instructions have been issued to the banks to submit claims within 45 days after obtaining depositors’ nod to claim deposit insurance, DICGC said in a release on Tuesday. The verification and settlement of the claims on submission by the banks shall be done within the next 45 days.

The name of Punjab and Maharashtra Co-operative Bank Limited (PMC) is also included in the list of 21 banks. Check the list of banks here:

The unpaid difference in the number of deposits up to the eligible amount (as per the final updated list submitted by banks by November 29, 2021) will be paid within 30 days of receipt (by December 29, 2021), DICGC said.

In August, the parliament had passed the DICGC Amendment bill ensuring the depositors of the bank account get up to Rs 5 lakh from DICGC within 90 days from the day RBI imposes moratorium on the bank. Earlier the deposit insurance limit was up to Rs 1 lakh.

FM Sitharaman then in a statement had said the legislation will benefit depositors, including those of the Punjab and Maharashtra Cooperative (PMC) Bank.

RBI in September 2019 had superseded the board of PMC Bank and placed under a moratorium including cap on withdrawals by account holders. The RBI had found financial irregularities and mi-reporting of loans given to real estate player HDIL.

Adhil Shetty, CEO, BankBazaar.com said, “The government has delivered on its earlier promise to help depositors with banks that had been placed under moratorium. The depositors were in limbo because they could neither pull the money out nor make a deposit insurance claim. The new announcement will not just help those stuck depositors but also improve faith in the banking system, especially in smaller banks where these issues are seen to frequently happen.”