labels: Economy - general
Nearly 93 per cent of bank deposits protected, says government news
24 October 2008

Mumbai: Nearly 93 per cent of bank deposits are fully protected under the deposit insurance and credit guarantee scheme, minister of state for finance Pawan Kumar Bansal informed the Lok Sabha.

''As at the end of March 2008, fully protected deposit accounts constituted 92.6 per cent of total number of deposit accounts," Bansal said in a written reply.

 He said the Deposit Insurance and Credit Guarantee Corporation (DICGC) extends insurance cover to small depositors and that there was no need for formulating any special law to protect the interests of bank depositors.

Deposit insurance is compulsory for all banks in the country and the insurance scheme covers all commercial banks, including local area banks, regional rural banks, co-operative banks and private banks across the country, Bansal said.

The deposit insurance covers amounts up to Rs1 lakh and every depositor is entitled to repayment of his deposit up to this amount in the event of liquidation, reconstruction, amalgamation of an insured bank, he said.

The minister's statement followed concerns raised by members of parliament over private sector bank ICICI Bank, which bore the brunt of investor concerns about its exposure to the financial crisis.

Financial sector authorities, including the prime minister, the finance minister and the Reserve Bank of India governor, have repeatedly assured the public about the safety of deposits with Indian banks.

But ICICI's shares have still lost 70 per cent of their value so far this year as investors fear the worst.

Indian banks' total exposure to failed Western banks amounted to $1 billion, a fraction of their total loan book of $510 billion as of end-September, according to RBI data.


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Nearly 93 per cent of bank deposits protected, says government