Page 18 - Banking Finance May 2022

CO-OPERATIVE BANK NEWS

proach to regulation and enables enti- an insurance cover of up to Rs 5 lakh As per the corporation, the amount of
ties to have a more focused approach. on bank deposits. assessable deposits stood at Rs
The report called for the need for align- Depositors of the two banks, submit- 1,49,67,770 crore at end-March 2022.
ment of business and investment rules ting valid documents, as mentioned The Deposit Insurance and Credit
of RRBs set two and a half decade back above, will be paid by credit to the al- Guarantee Corporation (Amendment)
with best practices and in sync with ternate bank account specified by de- Act, passed by Parliament in 2021,
Cooperative Banks and even PSBs. positors, or on their consent, to their made significant changes in the land-
The RRBs also need to partner effec- Aadhaar linked bank accounts, said a scape of deposit insurance in India.
tively with state governments to strive DICGC notice. Under the Act, the Corporation is liable
for the continued improvement in In the fiscal ended March 2022, the to pay the insured deposit amount to
credit culture and thereby need to corporation had settled main claims of depositors of an insured bank. Such li-
adapt to the fast-changing economic eight cooperative banks, including ability may arise when an insured bank
landscape and reorient their business nearly Rs 136 crores of 32,221 deposi- undergoes liquidation, reconstruction
model accordingly. tors of Goa-based The Madgaum Ur- or any other arrangement under a
RRBs agriculture outstanding is Rs 2.3 ban Co-op Bank, Rs 374 crores of scheme, and merger or acquisition by
lakh crore as of Mar'21, of which 99.3% 38,325 depositors of Maharashtra- another bank.
of lending went to farm credit only. " based Karnala Nagri Sahakari Bank,
This indicates RRBs have been reluc- and Rs 330 crore of 39,032 deposits of Unity Small Finance Bank
tant to lend beyond the farm credit. Maharashtra-based Karad Janata pays Rs 3,800 crore to 8.5
Sahakari Bank.
The share of agriculture infrastructure
lending is only 0.3% of total agriculture Initially, under the provisions of Section lakh PMC Bank depositors
lending. RRBs should thus focus more 16(1) of the DICGC Act, the insurance Unity Small Finance Bank paid around
on allied activities in order to diversify cover was limited to Rs 1,500 only per Rs 3,800 crore to depositors of the
their lending portfolio. RRBs should depositor. It was gradually increased to scam-hit Punjab and Maharashtra Co-
explore tie-up with the government Rs 1 lakh with effect from May 1, 1993 operative Bank (PMC Bank) after the
owned agri/ allied, agri activities like onwards. The insurance cover was Deposit Insurance and Credit Guaran-
dairy etc) and agribased fintech Com- later increased to Rs 5 lakh with effect tee Corporation (DICGC) had certified
panies besides exploring SHG/JLG link- from February 4 onwards. about 850,000 such valid accounts ear-
ages, where NPA in the portfolio is lier in the day.
DICGC insures all bank deposits, such
low" the report said.
as saving, fixed, current, and, recur- "Unity SFB received from DICGC a cer-
ring, except deposits of foreign Govern- tified list of erstwhile PMC Bank deposi-
Depositors of Lucknow co- ments; deposits of Central/State Gov- tors who are eligible to receive up to
operative bank to get ernments; Inter-bank deposits, and Rs.5 lakh of their deposits, post bank-
deposits of the State Land Develop- ing hours," Jaspal Bindra, executive
money from DICGC on ment Banks with the State co-opera- chairman, Centrum Group told.

April 27 tive banks. A depositor received her money subject
The Deposit Insurance and Credit It also does not cover any amount due to a maximum ceiling of Rs5 lakh as per
Guarantee Corporation (DICGC) will be on account of and deposit received the insurance cover. This means, if the
making payments to the eligible de- outside India, and amount which has total deposit outstanding is less than
positors of Lucknow-based Indian Mer- been specifically exempted by the cor- the benchmark size, the saver receives
cantile Cooperative Bank on April 27, poration with the previous approval of the full money back.
according to a notice. the RBI. Unity SFB has instantly credited the
Depositors of Beed-based Dwarakadas At the end of last fiscal, 252.6 crore deposit sum in all those depositors'
Mantri Nagari Sahakari Bank will get accounts were covered. Of these, 98.1 bank accounts with their holders send-
payments on June 6. DICGC, a wholly- per cent were fully protected accounts ing confirmation of their credit bal-
owned subsidiary of the RBI, provides and remaining were partly protected. ance on the Unity Bank App. T

18 | 2022 | MAY | BANKING FINANCE