The latest budget increased the ‘insurance’ on your bank deposits to Rs 5 Lakhs. Have you wondered what is it and what has been increased?
In simple words, if any commercial scheduled bank decides to call it a day, you are assured by the RBI that you will get Rs 5 Lakhs or your amount in your savings bank, whichever is lower, within two months of receipt of claim.
How will you get it? The Deposit Insurance and Credit Guarantee Corporation (DICGC) of RBI insures each account holder’s investments / deposits in commercial banks, including foreign banks, upto a limit of Rs 5 lakhs (it was Rs 1 Lakh earlier). RBI charges a yearly ‘insurance premium’ from the banks for it. For individuals having more than one account, each bank’s accounts are separately insured. Joint accounts, where names of account holders appear in different sequence, are also insured separately. However, those with the same sequence, are aggregated and insured as one.
Brig MC Pant (Retd), Humfauji Gurgaon