Mumbai: The European Commission has called for doubling bank deposit guarantees in the European Union to €100,000 ($136,649) and changes in accounting rules prompting the US  treasury to raise its banking deposit guarantees to $500 billion.

The European Commission (EC) moved a proposal to increase the guarantee limit for bank deposits from €20,000 to €100,000  (£78,037) after the British authorities extended the deposit guarantee scheme to £100,000.

The US authorities also expanded the federal insurance coverage to non-interest-bearing deposits held in commercial banks and senior unsecured debt of those institutions. 

The US treasury's move will extend federal deposit insurance cover to deposits totalling $500 billion with US banks and thrifts and around $1.5 trillion of bank debt.

The moves by the European Commission and the US treasury will help improve depositor protection and maintain the confidence of depositors in the financial safety net.

The EC, however, proposes to raise the minimum level of coverage for deposits within a one year period, initially raising it to €50,000 in the intervening period.

Member countries have been allowed to add to the minimum levels if found necessary.

Depositors will receive the payout within three days or at the most within three months in the event of bank failure.

The €50,000 limit is estimated to cover up to 80 per cent of bank deposits while the €100,000 limit would cover around 90 per cent of all EU bank depositors.

With coverage increased to €100,000, around 90 per cent of EU depositors would have their savings guaranteed.

The European Parliament and the Council of Ministers will take a final decision on the proposals.