Bill inserts interim payment mechanism for depositors during bank restrictions

This Bill amends the Deposit Insurance and Credit Guarantee Corporation Act, 1961 to ensure depositors can access their insured funds through interim payments by the Corporation when a bank is under restrictions (such as a moratorium) that prevent them from accessing their deposits. It also allows the Corporation to raise premium limits and charge penal interest for delayed repayments by banks.

The Bill affects the Deposit Insurance and Credit Guarantee Corporation (DICGC), insured banks (including banking companies and co-operative banks), depositors of these banks, and the Reserve Bank of India (RBI).

• Inserts a new Section 18A requiring the Corporation to make interim payments to depositors if a bank is subject to directions, prohibitions, orders, or schemes under the Banking Regulation Act, 1949 that restrict access to deposits.
• Mandates that the insured bank must provide a list of outstanding deposits within 45 days of the restriction taking effect.
• Requires the Corporation to verify claims and pay depositors within a total period not exceeding 90 days from the date of liability, subject to specific extensions.
• Allows the Corporation to raise the premium limit (currently 15 paisa per annum per hundred rupees) with the previous approval of the Reserve Bank of India.
• Empowers the Corporation to defer or vary repayment time limits from insured banks and charge penal interest at a maximum rate of 2% above the repo rate for delayed repayments.
• Amends definitions of 'defunct banking company' and 'defunct co-operative bank' to include cases where directions or schemes under Section 18A are issued.

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