Financial Insights

To save banks, we have to protect depositors: PM Modi

PM Narendra Modi announced on Sunday that the change to increase deposit insurance cover from ₹1 lakh to ₹5 lakhs will fully insure ₹76 lakh crore of savings. “Such a comprehensive insurance cover is not there even in developed nations,” Mr. Modi said adding that, “This will cover almost 98% of all banking accounts.”

Speaking at the ‘Depositors First:- Guaranteed Time-bound Deposit Insurance Payment up to Rs 5 lakh’, Mr. Modi recalled his time as a Chief Minister and said that he remembers when he was a CM and a bank faced problems, people’ pain was natural and at that time, he had repeatedly requested the Indian government to raise the ₹1 lakh deposit insurance amount to ₹ 5 lakh so that maximum households are satisfied.

He also mentioned the decision of introducing a 90-day deadline for depositors to get their money returned.

He was glad about the repayment of thousands of depositors within the 90 days of law notification.
PM Modi also emphasized savings for the banks and depositors at the same time.

RBI governor Shaktikanta Das said that according to the automated claim receipt and settlement process by DIGC, all the claims are fulfilled for the first set of banks where 90 days were over on 29th November.

Explaining further the banking infrastructure of the country, PM Modi, mentioned the banking facility in every village within the distance of 5 kilometers connecting with over 8.50 lakh sub-points.
He called it to be an important change for being a well-off rich banking sector. This made the country’s banking sector democratized in the actual sense.

As per the Prime Minister, the banking infrastructure progress has benefited the women community.
Quoting the latest NFHS data, the prime minister said that a total of 80% of women have their own bank accounts and the numbers for the women accounts are the same in Urban and Rural India.
To the banking sector, the Prime Minister said that all banks should aim to achieve 1.5X to 2X more than they have accomplished in the past 75 years and wait for the results for our country.
The RBI Governor also refer to the new governance guidelines for the commercialized banks and said that a committee has been formed for the Urban Co-operative sector to build reforms.

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