The Union Cabinet on Wednesday approved amendment to the DICGC Act to provide account holders access to up to Rs 5 lakh funds within 90 days of a bank coming under moratorium to ensure timely support to depositors.
Under the DICGC, each depositor’s bank deposit is insured up to Rs 5 lakh in each bank (for both principal and interest). The increase of insured amount from Rs 1 lakh to Rs 5 lakh will cover 98.3 per cent of all deposit accounts and 50.9 per cent of deposit value, Sitharaman noted.
The immediate beneficiaries of the DICGC Act amendments will be thousands of depositors of banks like PMC Bank, Yes Bank and Lakshmi Vilas Bank.
“Normally, it takes 8-10 years after complete liquidation to get money under insurance; but now, even if there is a moratorium, within 90 days, the process will definitely be completed, giving relief to depositors, the finance minister said.
Apart from the amendment to the DICGC Bill, Cabinet also cleared amendments to the Limited Liability Partnership (LLP) Bill, with an aim to decriminalise various provisions under the law and foster the ease of doing business in the country.
“With the Limited Liability Partnership Amendment Bill, we will have only 22 penal provisions, 7 compoundable offences, 3 non-compoundable offences,” Sitharaman said.
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Finance Minister Nirmala Sitharaman said, "We are expanding the scope of small LLPs. LLPs with contribution of less than or equal to Rs 25 lakhs and LLPs with turnover less than Rs 40 lakhs are considered as small LLPs. Now, the range will be from Rs 25 lakh to Rs 5 crore. The size of the business will be considered to be Rs 50 crore."