At 1L, In­dia’s bank de­posit in­surance low­est in world

The Times of India (New Delhi edition) - - Times Sport - NEWS NET­WORK DE­POSIT IN­SURANCE COV­ER­AGE IN $

Mum­bai: Pro­tec­tion of de­posits in In­dian banks through in­surance is among the low­est in the world in In­dia, at Rs 1 lakh per bank ac­count (about $1,508), well be­low the level in de­vel­oped economies and even other BRICS na­tions.

While the de­posit in­surance ex­tended in In­dia cov­ers 70% of de­pos­i­tors in terms of num­ber, only 7.8% of the de­posit base com­prises de­posits be­low Rs 1lakh. What this means is that risk-averse peo­ple who choose bank de­posits to park their life sav­ings could lose a large chunk of their funds if there is a bank fail­ure.

The is­sue of de­pos­i­tor pro­tec­tion, which last came to the fore when late fi­nance min­is­ter Arun Jait­ley in­tro­duced the Fi­nan­cial Res­o­lu­tion and De­posit In­surance Bill in 2017, has again gained im­por­tance in the wake of the PMC Bank fail­ure and re­ports of other pri­vate banks com­ing un­der RBI’s scan­ner.

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