Business Today reports the Deposit Insurance and Credit Guarantee Corporation of India (DICGC), a subsidiary of Reserve Bank of India (RBI) may double the insurance cover for depositors of banks from the existing Rs 1 lakh to Rs 2 lakh.
The idea is part of a research note prepared by a State Bank of India team. This may offer comfort to depositors in the event of a bank going bankrupt.
Section 16(1) of the DICGC Act empowers the corporation to raise the limit with approval of the central government. The issue has gained special importance following the PMC Bank scam.
The average balance of savings account is Rs 23,590 per depositor where the SBI research team has recommended the limit at Rs 1 lakh. If the average balance is Rs 2,75,908 per depositor, the insurance limit can be raised to Rs 2 lakh.
