The Central government on Sunday increased the bank deposit insurance cover, in case of problems occurring such as closure, from Rs 1 lakh to Rs 5 lakh. The amount has to be refunded to the depositor within 90 days. To mark the occasion, Prime Minister Narendra Modi, in a veiled attack on the previous regime, said that the middle class and the poor have time and again suffered from the banking crisis, but present India is determined on resolving these problems.

Speaking at the “Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs 5 lakh” programme, the Prime Minister said that the BJP-led Central government has enhanced financing system and has introduced various reforms in the last 7 years to benefit the poor and middle-class individuals. He said that in the last few days, more than 1 lakh depositors have got their money back which was stuck for years which amounts to more than Rs 1,300 crore.

“For years, the attitude of slipping the problems under the carpet was prevalent in our country. Our middle and poor class have time and again suffered from the banking crisis. But today’s new India is determined on resolving these problems,” PM Modi said.

“Today is an important day for the banking sector and account holders. Today symbolises the fact that the government has always kept the ‘Depositors First’. Depositors first, the name of this programme reflects our priority and responsibility towards them and their needs,” he said.

“We have increased the cap from Rs 1 lakh to Rs 5 lakh for these depositors to make the most out of this opportunity and build a sense of trust among our depositors,” he added.

Union Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das were also present at the event.

“The country has demonstrated of working together during this Covid pandemic. India’s moment has come where India can really become a gross driver of the world economy. That will be possible if all stakeholders in the banking sector work together,” Shaktikanta Das said.

With deposit insurance coverage of Rs 5 lakh per depositor per bank, the percentage of fully protected accounts at the end of the previous financial year constituted 98.1% of the total number of accounts, as against the international benchmark of 80%.

Addressing the “Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs. 5 Lakh” programme in Pune, Commerce Minister Piyush Goyal said, “Earlier there used to be a bank deposit insurance cover of Rs 1 lakh for the deposit of the same amount or more under the ‘Deposit Insurance Credit Guarantee Scheme’. It took nearly 10 years. When Prime Minister Narendra Modi was the Chief Minister of Gujarat, he had written to the then Prime Minister Manmohan Singh to extend this limit to Rs 5 lakh. The then government did not do it.” “Now, if a person faces any problem or setback for all of his deposits in a bank, and if the bank is incapable of returning the deposit, then the depositor will get a refund of Rs 5 lakh,” he added.

“The most important thing is that earlier it used to take nearly 10 years, now it has been ensured that the day on which the Reserve Bank of India decides to shut down the bank, the sum of Rs 5 lakh will be refunded to the depositors’ account within 90 days of the closure of the bank,” he said.