Two years after the PMC Bank crisis, depositors of stressed banks to get up to ₹5 lakh by December

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Two years after the PMC Bank crisis, depositors of stressed banks to get up to ₹5 lakh by December
BCCL
  • Depositors of 21 stressed Indian banks can withdraw funds up to ₹5 lakh by December.
    As per DICGC’s instructions, banks will need to prepare a list of depositors willing to claim deposit insurance by November 29, and submit all claims to the authority within 45 days or by October 15.
  • The move will help depositors of stressed Indian banks to recover their funds under the government’s deposit insurance and credit guarantee scheme.
Depositors of 21 stressed Indian banks, including the beleaguered Punjab & Maharashtra Co-Op. Bank Ltd., can take a sigh of relief as the Deposit Insurance and Credit Guarantee Corporation (DICGC) has said that they will be able to withdraw outstanding funds of up to ₹5 lakh by December.

“Accordingly, DICGC shall pay the depositors of the insured banks (as per list) placed under AID (with restrictions on withdrawal of deposits), an amount equivalent to the deposits outstanding (up to a maximum of ₹5 lakh) within a period not exceeding 90 days. The claims shall be settled in terms of Section 18A of the Act ibid and the claim settlement procedure of the Corporation,” it said in a press notification on Wednesday.

As per DICGC’s instructions, banks will need to prepare a list of depositors willing to claim deposit insurance by November 29, and submit all claims to the authority within 45 days or by October 15. “These banks shall submit a claim list by October 15, 2021 and update the position as on November 29, 2021 (with principal and interest), in a final updated (second) list, to enable DICGC settle the claim and discharge its insurance liability in full as per norms,” it said.

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The move will help depositors of stressed Indian banks to recover their funds under the government’s deposit insurance and credit guarantee scheme. In September 2019, after the collapse of PMC Bank, the Reserve Bank of India placed deposit withdrawal restrictions of up to ₹50,000 on the bank. Even as the limit was hiked to ₹1 lakh in June last year, many depositors who had bigger amounts parked in the bank were not able to get their money back.

But that will change as depositors of PMC bank, along with a few others, can now submit higher withdrawal claims. The move will benefit depositors at the following banks:


BankState
Punjab & Maharashtra Co-Op. Bank Ltd.Maharashtra
Adoor Co-Operative Urban Bank LtdKerala
Bidar Mahila Urban Co-Op. Bank LtdKarnataka
City Co-Operative Bank LtdMaharashtra
Hindu Co-Op. Bank Ltd, PathankotPunjab
Kapol Co-Operative Bank Ltd.Maharashtra
Maratha Sahakari Bank Ltd., Mumbai.Maharashtra
Millath Co-Operative Bank LtdKarnataka
Needs Of Life Co-Operative Bank Ltd.Maharashtra
Padmashree Dr. Vithal Rao Vikhe PatilMaharashtra
People’s Co-Operative Bank Ltd., KanpurUttar Pradesh
Rupee Co-Operative Bank Ltd.Maharashtra
Shri Anand Coop. Bank Ltd., PuneMaharashtra
Sikar Urban Co-Op. Bank LtdRajasthan
Sri Gururaghvendra Sahakara Bank NiyamithaKarnataka
The Mudhol Co-Operative Bank LtdKarnataka
Mantha Urban Cooperative Bank Ltd.Maharashtra
Sarjeraodada Naik Shirala Sahakari Bank Ltd.Maharashtra
Independence Cooperative Bank Ltd, NashikMaharashtra
Deccan Urban Co-Operative Bank Ltd., VijayapurKarnataka
Garha Co-Operative Bank Ltd., GunaMadhya Pradesh

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“It is advised that the depositors may contact the said banks and submit the declaration of willingness and also update any other documents/information, if needed by the bank, so that their claims can be included by the bank in the list by October 15, 2021,” said the notification.

Last month, the government raised the limit of deposit withdrawals to ₹5 lakh from the earlier ₹1 lakh, as it amended the DICGC Act. The move enables depositors to withdraw funds up to ₹5 lakh within 90 days of the regulator placing a bank under moratorium.

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