Rajya Sabha nod: DICGC Bill to help small depositors, says FM Nirmala Sitharaman

The Bill proposes to springiness customers entree to their deposits up to Rs 5 lakh wrong conscionable 90 days if their stressed banks are placed nether moratorium.

The Deposit Insurance Credit Guarantee Corporation (DICGC) Amendment Bill, which was approved by the Rajya Sabha connected Wednesday amid Opposition uproar, volition assistance tiny depositors, including those of the crisis-ridden PMC Bank, concern curate Nirmala Sitharaman said.

The Bill proposes to springiness customers entree to their deposits up to Rs 5 lakh wrong conscionable 90 days if their stressed banks are placed nether moratorium. The Bill covers each banks, including co-operative banks.

Similarly, the Upper House besides cleared the Limited Liability Partnership (Amendment) Bill 2021, which seeks to decriminalise a twelve offences and alteration specified entities to bask the aforesaid benefits arsenic ample companies. Hundreds of start-ups, chartered accountant firms and others that are registered arsenic LLPs are expected payment from this move.

The DICGC (amendment) Bill volition screen 98.3% of depositors and 50.9% of deposit worth successful the banking system, mode supra the planetary level of 80% and 20-30%, respectively, Sitharaman had said past week.

Also, arsenic per the extant system, customers of a fallen slope could laic their hands connected the insured deposit magnitude lone aft the bank’s liquidation, which would instrumentality adjacent 8-10 years. So, the amendments were brought successful to guarantee that customers, particularly the tiny ones, person time-bound entree to the insured magnitude to conscionable fiscal exigency. Last year, the authorities had raised the bounds of slope deposits insured nether the DICGC Act to Rs 5 lakh from Rs 1 lakh.

The DICGC is simply a wholly-owned limb of the Reserve Bank of India (RBI), which offers deposit insurance. If a customer’s deposit magnitude crosses Rs 5 lakh successful a azygous bank, lone up to Rs 5 lakh, including the main and interest, volition beryllium paid by the DICGC if the slope turns bankrupt.

Before the hike past year, the authorities had kept the deposit screen unchanged astatine Rs 1 lakh since May 1993, erstwhile it was raised from Rs 30,000 aft the information scam successful 1992 had led to the liquidation of Bank of Karad successful Maharashtra.

As for decriminalising definite offences, erstwhile the LLP (amendment) Bill is cleared by some the houses of Parliament, lone 22 penal provisions, 7 compoundable offences and non-compoundable offences volition remain.

After the Cabinet support to this Bill past week, Sitharaman said: “Between ample companies that are well-regulated and tiny proprietorships, LLPs did not person payment of either simplified regularisation oregon easiness of signifier nether proprietorship. With Wednesday’s Cabinet decision, we are bridging the spread and making LLPs much attractive, casual to handle.”

The firm affairs ministry has said that the nonsubjective of this determination is to region criminality of offences from concern laws wherever nary mala-fide intentions are involved.