NEW DELHI:
Finance Minister Nirmala Sitharaman on Friday said the government will bring legislations on raising insurance cover on bank deposits from the current Rs 1 lakh and regulating multi-state cooperative banks.
Media report suggests the bank deposit insurance in the country may be split into two categories, with retail cover being raised to Rs 5 lakh, from the current level of Rs 1 lakh; and a new scheme being introduced for wholesale depositors at Rs 25 lakh. When given effect, it will be the first upward revision in deposit insurance after 1993.
The last reset was on May 1, 1993, after the Bank of Karad went down in the securities scam of 1992. The reset prior to this at Rs 30,000 was given effect to on July 1, 1980.
These legislations will be brought during the Winter Session of Parliament starting coming Monday, the minister told reporters here.
These legislations assume significance in the wake of scam in the Punjab and Maharashtra Cooperative Bank affecting lakhs of customers who are facing difficulties in withdrawing their entire money due to restrictions imposed by the Reserve Bank of India.
At present, bank depositors get an insurance cover of Rs 1 lakh on their amount by the Deposit Insurance and credit Guarantee Corporation.
The finance minister also said the government has no plans to cut spending on welfare schemes and will encourage all the departments of the Union government to spend entire funds provided in the Budget.
When asked about the stress in the telecom sector, Sitharaman said, "We want no company to shut their operations. We want everyone to flourish."