As if agreeing to Sahakar Bharati’s viewpoints, Finance Minister Nirmala Sitharaman said there will be a rise from Rs 1 lakh in deposit insurance cover for account holders in the new FRDI Bill and the Finance Ministry. The Minister, however did not specify the limit.
Sahakar Bharati had demanded a separate Deposit Insurance Limit for Institutional Depositors, Special Provision in the DICGC Act, 1961 to protect the interests of Depositors of fraud affected banks eg PMC Bank Ltd, Pen Urban Co-op Bank Ltd, etc. The leaders of the Sahakar Bharati had first met the minister and letter penned a letter to her.
In the letter, said the team while interacting with the Indian Cooperative team at the Press Club of India, we demanded that the Deposit Insurance Limit for individual be raised to Rs 5,00,000/- and that of institutional investors to Rs 25,00,000/-
In her media interaction on Friday Sitharaman did not mention the likely new deposit insurance limit. But she said if the Cabinet approves it, we will move it in the upcoming winter session of Parliament.
Besides, the Sahakar Bharati team which comprised of Satish Marathe, Jyotindra Mehta and Uday Joshi demanded that banks be permitted to obtain over and above the proposed enhanced limits, additional Deposit Insurance Limits for their Depositors viz. individuals and institutions by payment of additional premium.
To protect the interests of depositors of such Banks that fail on account of frauds DICGC Ltd should create a separate Reserve, it demands. With notice of minimum 3 years, DICGC Ltd should start charging Risk Based Premium to all banks, irrespective of their nature of ownership, the letter tells the FM. This will enable Depositors to pick and choose bank/s of their choice for placement of Deposits, it clarifies.
Arguing the Sahakar Bharti team said that considering the profile of the Indian Banking Sector, it is estimated that 75% of the banks (PSUs, systematically important Banks and most Foreign Banks) are never likely to fail and hence, even if, the Deposit Insurance Limits are raised there is no case for enhancing the present Deposit Insurance Premium.
The Sahakar Bharti trio of Satish Marathe, Jyotindra Mehta and Uday Joshi explained that these recommendations have been made at the meeting of office bearers of Sahakar Bharati held in Vadodara from 10th to 13th November, 2019.
“Earlier, we had detailed deliberations with several stakeholders”, said Marathe mentioning like bankers and 
(PSU Banks Pvt Sector Banks, Co-op Banks), individual depositors, Institutional depositors (Educational Institutions, Mandirs, Hospitals, Public Libraries, Charitable and Social Institutions, etc), Co-op Institutions (Co-op Banks, Co-op Cr Societies, Co-op Housing Societies), MPs, MLAs, CAs, Social activists, Trade Unionists, media, etc.
A unanimous view has emerged that the Deposit Insurance Cover should be substantially raised immediately to protect the interests of Depositors which represent a cross- section of our Society, said the Sahakar Bharati team.
The present Deposit Insurance Limit was raised from Rs 30,000/- to Rs 1,00,000/- in the year 1993 and this calls for immediate review and enhancement of Deposit Insurance Cover, the letter felt.
Sahakar Bharati is the largest NGO in the Co-op Sector which are spread over 400 districts in 27 States. More than 20,000 Co-Ops are associated with the programs and activities of Sahakar Bharati.
