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Current Affairs

RBI Increased Insurance Cover on Bank Deposits

Current context: The Reserve Bank of India (RBI) said in a statement released on 4th February 2020 said that Insurance cover on bank deposits has been increased to Rs 5 lakh from Rs 1 lakh per depositor.
RBI Increased Insurance Cover on Bank Deposits
  • The Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the Reserve Bank of India provides the insurance coverage to the depositors.
  • The DICGC has raised the limit of insurance cover for depositors in insured banks to provide a greater measure of protection to depositors in banks and boost the confidence of people in the banking system.
  • The insurance coverage norm of the RBI is effective from 4th February 2020, with the approval of Government of India.
  • Deposit insurance was static at one lakh rupees since 1993.
  • Finance Minister Nirmala Sitharaman had made the announcement regarding increasing insurance cover to five lakh rupees in her Budget Speech 2020-21.
  • Now, the banks will pay a premium of 12 paise against 10 paise per 100 rupees deposited after the increased insurance coverage.
  • The deposit insurance scheme covers all banks operating in India, including:
    1. Private sector
    2. Cooperative
    3. Branches of foreign banks
  • Exemptions have been given to:
    1. Deposits of foreign governments
    2. Deposits of Central and State Governments
    3. Inter-bank deposits

Question: 

Q.1 The Reserve Bank of India has increased the Insurance cover on bank deposits per depositor for all banks in the country from Rs 1 lakh currently to __________?
a. Rs 4 lakh
b. Rs 5 lakh
c. Rs 7 lakh
d. Rs 10 lakh
RBI Increased Insurance Cover on Bank Deposits RBI Increased Insurance Cover on Bank Deposits Reviewed by Neha Verma on February 05, 2020 Rating: 5

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