Depositors of PMC Bank expected to get back up to Rs 5 lakh by November

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About Rs 10,000 crore of depositors’ money in banks under the Reserve Bank of India (RBI) moratorium, including the Punjab and Maharashtra Cooperative (PMC) Bank and Guru Raghavendra Sahakara Bank, will be payable to eligible customers by November end, under the recently-notified Deposit Insurance and Credit Guarantee Corporation (Amendment) Act.

Around Rs 10,000 crore to be made available

According to an anonymous official quoted by The Economic Times, “While banks are yet to finalise the eligible account holders, initial estimates suggest the total amount to be around Rs 10,000 crore.”

The withdrawal amount has been increased to Rs 5 lakh from Rs 1 lakh which was the limit set on February 4, 2020, on withdrawal including principal and interest, covered for the depositors across all accounts in a stressed bank.

The deposits by a customer are covered up to Rs 5 lakh, including principal and interest, across all accounts in a stressed bank under the new law. The limit was raised from Rs 1 lakh on February 4, 2020. It is the RBI’s special division, Deposit Insurance and Credit Guarantee Corporation (DICGC) that provides insurance cover on bank deposits. DICGC covers all commercial banks, including public sector banks, private banks, branches of foreign banks, local area banks, cooperative banks and regional rural banks. The RBI insures all kinds of deposits — savings account, fixed, current account and recurring.

Assessment on other banks being carried out

The Economic Times reported that as per the recent amendments, a bank under moratorium will collate details on accounts for which claims are admissible within the first 45 days, passing on the information to the DICGC, which will assess them over the next 45 days. ET quoted an executive as saying, “There are other banks as well where assessment is being carried out”.

In September 2019 the RBI took action against the PMC bank while restrictions on withdrawals by depositors were imposed on Guru Raghavendra Sahakara Bank in January 2019. The report mentioned that an ‘in-principle’ approval was given to Centrum Financial Services to set up a small finance bank, after it proposed a resolution scheme for PMC Bank Ltd. But, according to the business daily, the moratorium on the bank has been extended until December 31.