The Reserve Bank employees’ unions on Tuesday demanded the Government to hike the insurance cover on bank deposits from the present Rs 1 lakh to Rs 10 lakh.
The demand which was last revised in May 1993, has come after the ongoing crisis at Punjab and Maharashtra Cooperative Bank.
Recently, Finance Minister Nirmala Sitharaman had said that the Government would bring in a legislation during the ongoing Winter session to increase the deposit insurance cover from Rs 1 lakh, but did not specify a number.
According to a recent report by SBI Research, at Rs 1 lakh, the cover is one of the lowest and is at only 0.9 times per capita income. As against this, in Brazil and Russia, the same stands at Rs 42 lakh and Rs 12 lakh respectively.
The All-India Reserve Bank Employees Association had earlier suggested hiking the insured deposit cover to at least Rs 10 lakh, covering all types of deposits of an individual, which we reiterate and urge the Government to consider”.
At present, the Deposit Insurance and Credit Guarantee Corporation insures each bank depositor up to a maximum of Rs 1 lakh for both principal and interest as on the date of liquidation or cancellation of a bank’s licence.