Deposit Protection Boost: Is the ₹5 Lakh Insurance Cap Set to Rise?

The Indian government is considering a proposal to increase the deposit insurance limit, currently set at Rs 5 lakh. M Nagaraju, Secretary of Financial Services at the Ministry of Finance, announced on Monday that the proposal is under review. The potential increase comes in the wake of the recent crisis at New India Cooperative Bank, where the RBI imposed restrictions on withdrawals. The current Rs 5 lakh limit was established in April 2020, up from the previous Rs 1 lakh cap. While no specific timeline was provided for the decision, the move could offer greater protection to depositors in the event of bank failures.

 

Source: Business Standard