Budget 2020: Govt increases deposit insurance to Rs 500,000 from Rs 100,000

In the Union Budget, the government has announced that deposit insurance cover is being increased from Rs 1 lakh to Rs 5 lakh. The finance minister has said, “Robust mechanism is in place to monitor the health of all scheduled commercial banks and depositors’ money is safe.” The increase in deposit insurance cover is being done after 27 years. 

 

In May 1993, deposit insurance cover was increased to Rs 1 lakh from Rs 30,000. So far, with a deposit insurance cover of Rs 1 lakh, India had the lowest deposit insurance cover among BRIC nations and lately there was demand for increasing the deposit insurance cover after the crisis in the Punjab and Maharashtra Co-operative Bank.