Deposit insurance: Urban cooperative banks major beneficiaries, shows data

The Union Cabinet has cleared the Deposit Insurance and Credit Guarantee Corporation Bill, 2021, which will allow depositors to withdraw up to Rs 5 lakh in 90 days if their bank fails.
 
While the entire banking sector — public sector, private sector, cooperative banks, etc — is covered by this insurance, claims have predominantly come from the cooperative sector where lenders frequently face problems and are liquidated.
 
By March 2020, 357 urban cooperative banks (UCBs) had failed in the country, leading to payment of  Rs 4,903 crore in claims, including Rs 70.8 crore paid during FY20 and Rs 9.8 crore under the settlement policy.

Both claims settled and the number of liquidated banks peaked in 2009-10, with 31 co-operative banks, mainly in Maharashtra and Gujarat, failing.