Depositors in dozens of co-operative banks currently under moratorium by the Reserve Bank of India (RBI) can look forward to quick settlement now. That is because the government has notified September 1, 2021 as the date from which depositors of banks under moratorium will get up to Rs 5 lakh within 90 days. This would mean that by November 30, 2021, depositors of banks under the moratorium are likely to get their money back. The Ministry of Finance made this announcement via a notification on August 27, 2021.
According to a gazette notification dated August 27, 2021, the amount of Rs 5 lakh would be provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC). The government has notified September 1, 2021 as the date on which the provisions of the Act shall come into force,
As per the finance ministry notification issued on August 27, “In exercise of the powers conferred by sub-section (2) of section 1 of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021 (30 of 2021), the Central Government hereby appoints the 1st day of September 2021, as the date on which the provisions of the said Act shall come into force.”
Even depositors of banks that are already under moratorium by the RBI before the amendments were made will be eligible to get their money back within 90 days from September 1, 2021 i.e., by November 30, 2021.
The first 45 days are meant for the bank, which has come under stress, to collect all the details of the accounts where the claims will have to be made. This will then be forwarded to the insurance company, which in real-time will check it all up, and nearer the 90th day, depositors will get the money, Finance Minister Nirmala Sitharaman had said.
At present, it takes 8-10 years for the depositors of a stressed bank to get their insured money and other claims. Though the RBI and the Centre keep monitoring the health of all banks, there have been numerous recent cases of lenders, especially cooperative banks, being unable to fulfil their obligations towards the depositors due to the imposition of a moratorium by the RBI.
