Economy News

DICGC settles claims worth Rs 8,516.6 crore in FY22 – Mintpaisa

The Deposit Insurance and Credit Guarantee Corporation settled claims amounting to Rs 8,516.6 crore in 2021-2022 on about 12.94 lakh of depositors of liquidated banks, merged entities and those subject to restrictions by the Reserve Bank. All commercial banks including branches of foreign banks operating in India, local banks, regional rural banks, small financial banks and payment banks are covered by the deposit insurance scheme.

Of the Rs 8,516.6 crore settled by the DICGC, Rs 5,059.2 crore related to liquidated and merged banks and Rs 3,457.4 crore related to banks under All Inclusive Directions (AID) of the RBI, says the annual report of the DICGC.

Under IDA, restrictions are placed on deposit withdrawals.

The report states that in the financial year ending March 2022, claims worth Rs 5,059.18 crore were paid to nearly 10.34 lakh depositors of liquidated and merged banks.

A total of Rs 3,457.44 crore has been disbursed to about 2.6 lakh bank depositors under IDA, he added. All claims were from cooperative banks.

“There were no complaints from commercial banks,” the report said.

DICGC, a wholly owned subsidiary of the RBI, provides insurance cover on bank deposits.

By 2020, the government had increased deposit insurance coverage fivefold to Rs 5 lakh. The enhanced deposit insurance coverage of Rs 5 lakh came into effect on February 4, 2020.

Later, the DICGC Act was again amended under which the Company is required to provide insurance cover of up to Rs 5 lakh to depositors of banks placed under IDA by the Reserve Bank.

The DICGC said the number of fully protected accounts (256.7 crores) at end-March 2022 constituted 97.9% of the total number of accounts (262.2 crores) in the banking system, against the international benchmark of 80%.

The total premium received by DICGC in 2021-22 stood at Rs 19,491 crore, with commercial banks contributing 93.6% and cooperative banks accounting for the remaining 6.4%.

The report states that a landmark event in 2021-22 was the amendment of the DICGC Act of 1961 which allowed time-limited interim payment to depositors of banks placed under AID by the RBI, a practice not generally seen in other countries. other jurisdictions.

“In accordance with these amendments, the claims of depositors of 22 urban cooperative banks under AID have been settled by DICGC…”, the report states.

Another major event was the provision of financial assistance to Unity Small Finance Bank (USFB) to make payment of deposit insurance to depositors of the former Punjab and Maharashtra Co-operative Bank (PMCBL) during fusion.

The number of insured banks registered with the DICGC stood at 2,040 as of March 31, 2022

Since the inception of deposit insurance, a cumulative amount of Rs 295.9 crore has been paid till March 31, 2022 for claims from 27 commercial banks, Rs 10,524.3 crore for claims from 374 liquidated cooperative banks (including Rs 5,059.2 crore settled in 2021-22), and Rs 3,457.4 crore towards claims of 22 urban cooperative banks placed under AID.

The Deposit Insurance Act of 1961 came into force on January 1, 1962.


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