RS passes Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill

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The Rajya Sabha on Wednesday passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill amid opposition uproar, with Finance Minister Nirmala Sitharaman saying the proposed legislation will help small depositors. The bill was passed after a short debate.

The Bill proposes that even if a bank is temporarily unable to fulfil its obligations due to restrictions such as moratorium, depositors can access their deposits to the extent of the deposit insurance cover through interim payments by the Deposit Insurance and Credit Guarantee Corporation (DICGC). For this, the Bill seeks to insert a new Section in the DICGC Act, 1961.

Sitharaman said the legislation would provide relief to small bank depositors. She said the proposed legislation will also help depositors of 23 cooperative banks which are under stress. “PMC Bank depositors will also benefit from this bill,” she said.

The bill also seeks to amend Section 15 of the DICGC Act to enable the Corporation to increase the ceiling on the amount of premium, with the prior approval of the Reserve Bank of India (RBI).