Depositors of these banks, who have not yet submitted their claims, are advised to contact the respective banks, according to a public notice from the DICGC.
Customers of 16 struggling cooperative banks will benefit from deposit insurance coverage of up to Rs 5 lakh on Monday through the Reserve Bank of India subsidiary DICGC as part of its tenure under a new law. The Deposit Insurance and Credit Guarantee Corporation (DICGC) previously prepared a list of 21 banks, but five, including the Punjab & Maharashtra Co-Operative Bank (PMC Bank), are not on the list because they are either in the process of a merger, or outside the moratorium.
In August, Parliament passed the Deposit Insurance and Credit Guarantee Company (Amendment) Bill of 2021, ensuring that account holders get up to Rs 5 lakh within 90 days of l imposition by the RBI of a moratorium on banks.
Following its promulgation, the government notified September 1, 2021, of the date on which the provisions of the Law would come into force. The mandatory 90 days from the notified date end on November 29, 2021.
Depositors of these banks, who have not yet submitted their claims, are advised to contact the respective banks, according to a public notice from the DICGC.
“Claims must be supported by officially valid identity documents and written consent to receive the amount to the credit of their deposit account (declaration of will) subject to a maximum of Rs 5 lakh as well as other contact details banks in which the said amount can be credited, ”he said.
Depositors submitting valid documents, as mentioned above, will be paid by credit to the alternative bank account specified by depositors or upon their consent, to their bank account linked to Aadhaar, he said.
For the second phase, the deadline for submitting documents is December 10, 2021 while the payment date is December 31, 2021, he added.
Besides PMC Bank, depositors from Hindu Co-Op Bank Ltd, Pathankot from Punjab, Rupee Co-Operative Bank Ltd and Needs Of Life Co-Operative Bank Ltd from Maharashtra and Bidar Mahila Urban Co-Op Bank Ltd from Karnataka are excluded. It should be noted that in June the RBI gave its agreement in principle to a consortium of Centrum Financial Services and the fintech start-up BharatPe to acquire the ailing PMC Bank.
Completing the bridges for the takeover, the RBI in October granted a license for a small finance bank to the consortium. Recently, the DICGC stated that it may be necessary to invoke the provisions of Article 18 A (7) (a) of the Deposit Insurance and Credit Guarantee Corporation Act 2021 (Amendment) . In accordance with Article 18 A (7) (a)) of the Law, if a troubled bank is under the resolution process, the disbursement period of Rs 5 lakh may be extended by 90 days.
Last year the government increased deposit insurance coverage five-fold to Rs 5 lakh. The enhanced deposit insurance coverage of Rs 5 lakh went into effect on February 4, 2020.
Each bank paid 10 paise as an insurance premium for every Rs 100 of deposit. It was increased to 12 paise per Rs 100 in 2020. It cannot exceed 15 paise at any time per deposit of Rs 100.
It should be noted that the increased deposit insurance coverage of Rs 5 lakh is effective from February 4, 2020. The increase was made after a gap of 27 years as it has been static since 1993.
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