14 hours Ago By Subhana Shaikh
The proportion of insured deposits to assessable deposits of commercial banks has declined to nearly 42% in fiscal 2024 as against 43.2% in the preceding year, the Reserve Bank of India's report on trend and progress of banking in India 2023-24 showed. Public, private and foreign banks have witnessed a year-on-year decline in the proportion of insured deposits to assessable deposits, whereas small finance banks, payments banks, regional rural banks and local area banks have seen a rise.
Deposit insurance helps in protecting bank depositors in full or part from losses caused by a bank's inability to pay its debts when due. Deposit Insurance and Credit Guarantee Corp., a wholly-owned subsidiary of the RBI, looks at deposit insurance.
DICGC insures deposits such as savings, fixed, current and recurring, among others. For fiscal 2024, a total of 1,997 banks were insured by DICGC and currently the deposit insurance coverage limit is Rs 5 lakh per depositor per account. This limit covers 97.
7% of deposit accounts and in terms of value, 43.1% of assessable deposits are insured. The deposit insurance fund is constituted with DICGC to settle the claims of insured deposits in the event of liquidation or imposition of all-inclusive directions.
During fiscal 2024, claims amounting to Rs 1,432 crore were settled through deposit insurance fund and the balance was Rs 1.98 lakh crore. "With the growth of DIF (17.
2%) above that of insured deposits (9.1%), the reserve ratio (RR) improved to 2.11% at end-March 2024 from 1.
96% a year ago," the RBI report said. DICGC also made a total recovery of claims worth Rs 901 crore in fiscal 2024, as against Rs 883 crore in the preceding year..
