Roadblocks removed; Lok Sabha passes DICGC Bill on Monday

The Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 was passed by a voice vote amid opposition uproar in the Lok Sabha on Monday. The Rajya Sabha had passed the Bill last week.

The amendment in the Act would be implementable once the govt notifies the same, thereby benefiting crores of small depositors in the country. Finance Minister Nirmala Sitharaman said the legislation would benefit small depositors, including those of the Punjab and Maharashtra Cooperative (PMC) Bank.

Media reports quote Tejasvi Surya saying all Guru Raghavendra Bank depositors would be benefitted by DICGC Bill. Ms Sitharaman herself said that to begin depositors of 23 co-op banks are going to be benefitted from the new amended DICGC Act.

After the passage of the bill in Lok Sabha, Sitharaman official handle tweeted saying the salient features of the bill are-Interim payment by DICGC to depositors in banks with restrictions/moratorium imposed by RBI.”

Another tweet by her office says “After the passage of this bill, the deposit insurance coverage in India has gone up to 98.3% and covered deposit value has increased to 50.9%, while the corresponding figures globally are only 80% and 20% – 30%.

Some interesting reactions on the tweet of Sitharaman were also seen on social media. Reacting to the statement that 98 percent depositors and 50 % of savings would be protected, one Rajender Sahani read “So we agree that less than 2 % Indians own 50% of the wealth! Am i correct?”.

One Nishanth K replied “Respected madam this a big boost to small depositors, but what happens to big depositors this government has protecting citizens, please bring in a bill that helps 100% of depositors if not the Indian banking system will collapse for sure.”

Hailing the passage of the bill, Sahakar Bharati leader Satish Marathe said “It’s a big day for both UCBs and their depositors. Your money up to Rs 5 lac is safe now”. Earlier, Marathe had argued hard that the introduction of the condition of “Moratorium” in the bill is not going to help banks.

It is hoped that Depositors of all those Urban Co-op Banks (eg Pen Urban Co-op Bank Ltd, Rupee Bank Ltd from Maharashtra, Guru Raghavendra Co-op Bank Ltd from Karnataka, etc ) – which have been under RBI Directions for several years – will also be covered as a consequence of the proposed Amendment. Some of the Urban Co-op Banks have been under RBI Directions for over 7 to 9 years.