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Depositors of Lucknow cooperative bank to get money from DICGC on April 27

The Deposit Insurance and Credit Guarantee Corporation (DICGC) will be making payments to the eligible depositors of Lucknow-based Indian Mercantile Cooperative Bank on April 27, according to a notice.

Depositors of Beed-based Dwarakadas Mantri Nagari Sahakari Bank will get payments on June 6. DICGC, a wholly-owned subsidiary of the RBI, provides an insurance cover of up to Rs 5 lakh on bank deposits.

Depositors of the two banks, submitting valid documents, as mentioned above, will be paid by credit to the alternate bank account specified by depositors, or on their consent, to their Aadhaar linked bank accounts, said a DICGC notice.

In the fiscal ended March 2022, the corporation had settled main claims of eight cooperative banks, including nearly Rs 136 crores of 32,221 depositors of Goa-based The Madgaum Urban Co-op Bank, Rs 374 crores of 38,325 depositors of Maharashtra-based Karnala Nagri Sahakari Bank, and Rs 330 crore of 39,032 deposits of Maharashtra-based Karad Janata Sahakari Bank.

Initially, under the provisions of Section 16(1) of the DICGC Act, the insurance cover was limited to Rs 1,500 only per depositor. It was gradually increased to Rs 1 lakh with effect from May 1, 1993 onwards. The insurance cover was later increased to Rs 5 lakh with effect from February 4 onwards.

DICGC insures all bank deposits, such as saving, fixed, current, and, recurring, except deposits of foreign Governments; deposits of Central/State Governments; Inter-bank deposits, and deposits of the State Land Development Banks with the State co-operative banks.

It also does not cover any amount due on account of and deposit received outside India, and amount which has been specifically exempted by the corporation with the previous approval of the RBI.

At the end of last fiscal, 252.6 crore accounts were covered. Of these, 98.1 per cent were fully protected accounts and remaining were partly protected.

As per the corporation, the amount of assessable deposits stood at Rs 1,49,67,770 crore at end-March 2022.

The Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, passed by Parliament in 2021, made significant changes in the landscape of deposit insurance in India.

Under the Act, the Corporation is liable to pay the insured deposit amount to depositors of an insured bank. Such liability may arise when an insured bank undergoes liquidation, reconstruction or any other arrangement under a scheme, and merger or acquisition by another bank.

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