DICGC mops up Rs 9,561 crore premium in first half of fiscal

The Deposit Insurance and Credit Guarantee Corporation (DICGC), which offers insurance coverage cowl to depositors of banks, has collected deposit insurance coverage premium of Rs 9,561 crore from banks through the six months ended September 2021, of which 93.5 per cent was contributed by business banks and the remaining by co-operative banks.
With this, the Deposit Insurance Fund (DIF), constructed out of the premia paid by insured banks and coupon revenue obtained on investments in authorities securities, swelled to Rs 1.41 lakh crore as of September 2021, yielding a reserve ratio (ratio of DIF to insured deposits) of 1.81 per cent, up from Rs 1.29 lakh crore in March 2021, the RBI stated within the Financial Stability Report (FSR).
The settlement and restoration of claims from banks within the first half of 2021-22 was considerably greater than a yr in the past, the central financial institution stated. As on December 20, 2021, DICGC has paid Rs 1,374 crore in respect of 1.09 lakh depositors of 16 out of 21 troubled banks – together with PMC Bank — that have been eligible to obtain such pay-outs, it stated.
DICGC, headed by RBI Deputy Governor Michael Patra, pays out a most of Rs 5 lakh as insurance coverage to the depositor of a troubled financial institution no matter the entire quantity that the shopper has deposited within the financial institution. It paid Rs 393 crore to depositors within the first six months of the half-year ended September 2021, an increase of 1,334 per cent when in comparison with Rs 27.4 crore in the identical interval of final yr.
The variety of registered insured banks as on September 30, 2021 stood at 2,049 comprising 140 business banks (together with 43 RRBs, two LABs, six fee banks and 11 small finance banks) and 1,909 co-operative banks. With the current restrict of deposit insurance coverage at Rs 5 lakh, 98.1 per cent of the entire deposit accounts, amounting to 267.2 crore, and 49.0 per cent, amounting to Rs 78.02 lakh crore, of the entire assessable deposits are absolutely protected, the RBI stated.

DICGC Act, 1961 was amended in August 2021 to supply for time sure fee (interim) of deposits to depositors as much as the quantity insured within the case of banks with restrictions on withdrawal of deposits imposed by the Reserve Bank. In phrases of the modification which got here into impact from September 1, 2021 the insured financial institution is required to submit its declare inside 45 days of imposition of such restrictions and the Corporation has to get the claims verified inside 30 days and pay the depositors throughout the subsequent 15 days.
The modification empowers the DICGC to make interim deposit insurance coverage payouts to distressed banks, even when they’re beneath the Reserve Bank’s all-inclusive instructions (AID), inside 90 days of imposition of such instructions.
In case the Reserve Bank finds it expedient to deliver the financial institution beneath a scheme of amalgamation/compromise or association/reconstruction, the legal responsibility of the Corporation will get prolonged by an extra interval of 90 days. The different amendments embody elevating the restrict of 15 paise per Rs 100 of deposits on insurance coverage premium with the approval of the Reserve Bank. Furthermore, the DICGC, with the approval of its board, could defer or fluctuate the reimbursement interval for the insured financial institution to discharge its legal responsibility to DICGC and cost penal curiosity of two per cent over the repo fee in case of delay, it stated.

Pvt banks CEOs get 67 instances of typical worker as wage
MUMBAI: There’s an enormous hole between the compensation paid to the Chief Executive Officer (CEO) of a personal financial institution and its workers.
“For PSU banks, on an average, CEOs earn 3 times the typical employee, while the same was as high as 75 times in the case of small finance banks and 67 times in the case of private banks,” the RBI stated in its Report on development and progress in banking. The corresponding a number of was low for international banks because the remuneration obtained by workers is comparatively excessive. The variation throughout financial institution teams remained constant by way of 2018-19 and 2019-20, it stated.
On November 4, 2019, the Reserve Bank revised its pointers on compensation, aligning them to the Financial Stability Board norms. The new pointers turned efficient from April 1, 2020.