[sbinews] DICGC to double premium (Business Standard)
- From: "Rajendra S. Pai" <rs.pai@xxxxxxxxx>
- To: <sbinews@xxxxxxxxxxxxx>
- Date: Thu, 12 Feb 2004 09:05:26 +0530
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DICGC to double premium
(Business Standard)
K Ram Kumar in Mumbai
Published : February 12, 2004
The Deposit Insurance Credit Guarantee Corporation (DICGC) has decided to
double the deposit insurance premium to 10 paise per Rs 100 per annum of
assessable deposits over a two year period.
This decision is a fallout of the corporation having had to settle claims
for a few hundred crore rupees in the last three years due to the failure of
banks, particularly in the co-operative sector.
The payouts have caused a severe drain on the Corporation's Deposit
Insurance Fund (DIF).
In the first phase the premium will be raised to eight paise per Rs 100 of
assessable deposits from the financial year 2004-05 and 10 paise per Rs 100
of assessable deposits from the financial year 2005-06.
Thus the premium of 8 paise will be payable for the half years beginning
April and October 2004 and the premium of 10 paise will be payable from the
half year beginning April 2005 onwards.
The corporation will continuously review the DIF and will consider revising
the premium further from time to time with the objective of maintaining a
strong DIF.
It is felt that while there is sufficient corpus in DIF for the present, it
is necessary to build up a sound DIF in the long term to protect the
interests of the banking system.
As per the DICGC Act, each depositor in a insured bank is insured up to a
maximum of Rs 1 Lakh for both principal and interest amount held by him in
the same right and capacity as on the date of liquidation/cancellation of
bank's licence or the date on which the scheme of
amalgamation/merger/reconstruction comes into force
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