In a major development the Gujarat high court has issued a notice to the RBI in response to a PIL demanding that the amount of secured deposits in cooperative banks should be raised and brought on a par with the security available with the nationalized banks, reports Times of India.
The PIL says the Deposit Insurance and Credit Guarantee Corporation Act and the scheme formed there under to put forth its case that the secured amount over deposits in cooperative banks, which is Rs 1 lakh at present, should be increased up to at least Rs 10 lakh.
The petition argues that that since all cooperative banks function under the RBI norms, the RBI should protect the depositors who have their money in cooperative banks.
The amount of secured deposit from Rs 30,000 was increased to Rs 1 lakh in 1993. Since then, there is no revision. The authorities have been silent over the issue and hence the HC’s intervention sought, the petition assets.
The issue is close to the hearts of the victims of failed urban cooperative banks, who have put in their life’s savings in them. NAFCUB has been demanding that the upper limit of Rs one lakh- a depositor can claim from a failed urban cooperative bank (UCB), to be raised in the pasrt too.
It deserves mention that on liquidation whatever the deposited amount a depositor’s claim cannot exceed Rs one lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). As of now even with a high deposit of Rs 10 lakh a depositor can claim back just Rs one lakh. There is a systematic injustice of the DICGC regulations, say many cooperators.
Deposit Insurance and Credit Guarantee Corporation ( DICGC) is a subsidiary of the Reserve Bank of India. It was established on July 15, 1978 under the Deposit Insurance and Credit Guarantee Corporation Act, 1961 for the purpose of providing insurance of deposits and guaranteeing of credit facilities. The DICGC insures all bank deposits, such as saving, fixed, current, recurring for up to the limit of Rs. 100,000 of each deposit in a bank.
Its a good move.The limit should at least be increased to Rs 1000000. In fact all the depositors should get their all deposited money as there is no fault of depositors and RBI should take all the responsibility as RBI has control on co operative banks
Its an excellent observation by the Gujarat HC and deserves to be implemented with retrospective effect from 1993 itself so that the depositors who have lost their hard earned money in cooperative banks would get justice.It is well known fact that all the cooperative banks all over India which had to be liquidated or merged with stronger cooperative bank were badly managed by the Politicians and the poor hapless depositors had to pay penalty for their misdeeds.The politicians in collusion with the borrowers have made the Citizens suffer for NO fault of theirs.If the finance minister Shri.Arun Jaitleyji,RBI Governor Shri.Urjit Patelji and PM Shri.Narendrabhai Modiji must certainly act and ensure that EVERYINDIAN CITIZEN who banks in India and deposits their hard earned money in government approved financial institution should protected 100% of their deposits as their contribution is to strengthen the Bank and hence justice to be meted out to them.
Best Regards,
Sridhar K
9833110481