Depositors Of 21 Banks, Including PMC Bank, To Get Up To Rs 5 lakh Each: DICGC

A total of 21 banks, including Punjab and Maharashtra Cooperative Bank, have been placed under AID, and the insured bank's depositors would receive monies through the deposit insurance scheme.

PMC Bank | File Image

The Deposit Insurance and Credit Guarantee Corporation (DICGC) will pay depositors of insured banks put under all-inclusive directives (AID) a sum equal to the outstanding deposits (up to a limit of Rs 5 lakh only) within not more than 90 days, said DICGC in a statement.

A total of 21 banks, including Punjab and Maharashtra Cooperative (PMC) Bank, have been placed under AID, and the insured bank's depositors would receive monies through the deposit insurance scheme.

The 21 urban cooperative banks include 11 from Maharashtra, 5 from Karnataka, and one each from Kerala, Punjab, Uttar Pradesh, Rajasthan, and Madhya Pradesh.

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The DICGC has asked depositors of 21 urban cooperative banks (UCBs) currently under its AID to contact their banks and submit the declaration of willingness to enable DICGC to make payments and update any other documents/ information, including KYC if needed by the bank.

The DICGC stated that banks had been given the requisite guidelines to make claims within 45 days after securing depositors' willingness to claim deposit protection.

"The verification and settlement of the claims on submission by the banks in the aforesaid list shall be done within the next 45 days by DICGC (November 29, 2021). These banks shall submit a claim list by October 15, 2021, and update the position as of November 29, 2021 (with principal and interest), in a final updated (second) list to enable DICGC to settle the claim and discharge its insurance liability in full as per norms. Unpaid (updated willingness list) / difference in the number of deposits up to the eligible amount (as per the final updated list submitted by November 29, 2021) will be paid within 30 days of receipt (i.e., by December 29, 2021)," said the statement.

During the monsoon session, Parliament enacted the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021, which was notified on August 27. Last year, the RBI imposed limitations on Punjab and Maharashtra Cooperative (PMC) Bank, prompting the change.

The deposit insurance limit was previously set at Rs 1 lakh.

The RBI succeeded the board of PMC Bank in September 2019, and the bank was placed under a moratorium, which included a limit on account holders' withdrawals. The RBI had found financial irregularities and non-reporting of loans given to real estate player HDIL.