The Union Cabinet has cleared the Deposit Insurance and Credit Guarantee Corporation Bill, 2021, which is able to permit depositors to withdraw as much as Rs 5 lakh in 90 days if their financial institution fails.
While the complete banking sector — public sector, non-public sector, cooperative banks, and so on — is roofed by this insurance coverage, claims have predominantly come from the cooperative sector the place lenders continuously face issues and are liquidated.
By March 2020, 357 city cooperative banks (UCBs) had failed within the nation, resulting in fee of Rs 4,903 crore in claims, together with Rs 70.8 crore paid throughout FY20 and Rs 9.8 crore beneath the settlement coverage.
Both claims settled and the variety of liquidated banks peaked in 2009-10, with 31 co-operative banks, primarily in Maharashtra and Gujarat, failing.
