Deposit Insurance and Credit Guarantee Corporation i.e. DICGC will pay the customers of 20 banks going through the resolution process, excluding PMC Bank, in the first tranche.
New Delhi. Customers of the customers of the crisis-hit Punjab and Maharashtra Co-operative ie PMC Bank will not get an insurance cover of up to Rs 5 lakh in the first phase. The reason for this is that this bank is still in the resolution process. Deposit Insurance and Credit Guarantee Corporation i.e. DICGC will pay the customers of 20 banks going through the resolution process, excluding PMC Bank, in the first tranche. The mandatory period of 90 days for payment in the first phase will end on November 30.
The DICGC had recently said that the provisions of Section 18A (7) (a) of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021 may need to be invoked. Under these provisions, if a bank is under resolution process, the period for payment of Rs 5 lakh can be further extended by another 90 days.
RBI grants small finance bank license to Centrum and BharatPe
Earlier in June, the Reserve Bank of India allowed a consortium of Centrum Financial Services and digital payments startup company BharatPe to acquire crisis-hit PMC Bank. Clearing the way for this acquisition, the Reserve Bank had earlier this month granted the license of Small Finance Bank to the consortium of Centrum and BharatPe.
What is DICGC
The security of deposits up to Rs 5 lakh in banks is guaranteed by DICGC. DICGC, a subsidiary owned by the Reserve Bank of India, provides insurance cover on bank deposits. As per the provisions of deposit insurance of 5 lakhs, in case of bank insolvency or cancellation of its license, an amount of up to Rs 5 lakh is paid to the depositor, irrespective of the amount deposited in the bank.
