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There’s no need to panic: find out how much you can recover back from your deposit if the bank fails

Are you concerned about the security of your money in the bank? In recent years, as news of the failure of numerous small banks has circulated, bank account holders have wondered how much money will be restored from their savings if their bank fails. The rule in this regard was revised in the previous year, i.e. 2020, and the guarantee limit on the amount placed in the bank by investors was increased. Know that if a bank fails or goes bankrupt, its depositors will get their money back.

In reality, Prime Minister Narendra Modi discussed this in his programme “Depositor First: Guaranteed Time-bound Deposit Insurance Payment up to Rs. PM Modi stated that, notwithstanding the decision made in 2020, this guarantee is still lacking in many nations throughout the world.

In 2020, what decision did the Central Govt. make?

In the year 2020, the Central Government amended the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act. Following this, the bank’s deposit guarantee increased to five lakh rupees. Account holders were formerly guaranteed deposits of up to Rs 1 lakh. Your bank deposits of up to Rs 5 lakh are now safe. That is, if the bank in whose account your money is deposited fails, you will receive a five-lakh-rupee refund.

What happens if you deposit more than Rs. 5 lakh in the bank?

The Rs 5 lakh security guarantee on bank deposits means that no matter how much you deposit in a bank, if the bank defaults or goes bankrupt, you will only get Rs 5 lakh back. Only five lakh rupees will be reimbursed if you have accounts in numerous branches of the same bank and the amount deposited in them is greater than five lakhs. That is, just the first Rs 5 lakh of your money would be covered.

The DICGC distributes funds to account holders

Experts believe that the government does not allow the bank in crisis to fail and instead merges it with a larger bank. If a bank fails, the DICGC is responsible for paying all account holders. In exchange for guaranteeing this sum, the DICGC charges the banks a premium.

News Desk

The Shining Media is an independent news website and channel, covering updates from the world of Politics, Entertainment, Sports, International, National, and a lot more.



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