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The bank goes failure don’t worry Government has a notable amount for you

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Finance Minister Nirmala Sitharaman stated that deposit protection case for small investors has been raised to Rs 5 lakh from Rs 1 lakh. This means that patrons will get back at most Rs 5 lakh if their bank goes out of operation.

This is the first time in 27 years that the coverage limit on bank deposits has been renewed. The matter of hiking deposit insurance coverage came to the fore after Mumbai-headquartered Punjab and Maharashtra Co-operative Bank (PMC Bank) came under RBI scanner last year.


Deposit insurance started in India with a limit of Rs 5,000 in 1968. This was developed to Rs 10,000 two years later in 1970. The next change happened in 1976 to Rs 20,000. Again in 1980, the limit was adjusted to Rs 30,000. The last update took place way back in 1993 when it was raised to Rs 1 lakh.

SBI Research had shown in a recent paper that the deposit coverage in India is one of those lowest in terms of per capita revenue. This measure would be feeling increasing one without putting any financial strain on the government.


Finance Minister Nirmala Sitharaman has said that government has infused Rs 3.5 crore capital into public sector banks (PSBs) to help them manage administrative capital conditions and finance germination plans. In the last Budget, the government had introduced Rs 70,000 crore.

“We have introduced Rs 3.5 crore capital into PSU banks. A few among them will be encouraged to move the capital market for fundraising purposes”, she said in her Budget Speech.

She also announced the selling government’s stake in IDBI Bank to private investors. In the last fiscal, the government had sold a stake in IDBI Bank to insurance behemoth LIC. As of now, LIC owns 51 per cent controlling stake in the bank, while the government holds 46 per cent shares in the lender.

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