The problem of low deposit cover in India in comparison with other countries is assuming a serious proportion as banks have continuously been showing a poor performance, reports Business Line.
Indian bank deposits are insured by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC) for up to Rs 1 lakh. This works out to about $1,394 (at the current conversion rate of Rs 71.7 to a dollar). This is far lower than the cover available in other countries, a survey carried out by an international organization says.
Deposit insurance in India covers all banks, including co-operative banks.
It is said beneficiaries of the deposit insurance system, up until now, have mainly been urban cooperative banks. During 2017-18, DICGC settled claims for Rs 43 crore in respect of 18 co-operative banks.