It's Time To Raise Cover Of Deposit Insurance

It’s been 26 years since insurance deposit cover was revised. With bank failures on the rise, a higher cover is required for depositors to protect their life savings.

- Naveen Kumar

Punjab and Maharashtra Cooperative Bank (PMC Bank) is facing an unprecedented crisis where 73 percent of its total loan book is exposed to cashstrapped realty firm Housing Development and Infrastructure. While depositors in the PMC Bank are hoping to get their deposits back, there is another bank - Lakshmi Vilas Bank - that has fallen into trouble. The Reserve Bank of India (RBI) has put the bank under prompt corrective action while it reviews and manages irregularities in its books. There are many other banks dealing with asset quality deterioration, making depositors nervous.

Banks deploy the money collected from numerous depositors who trust the bank with their life savings. These depositors are concerned whether their hard-earned money is safe or not.

It is imperative that interests of depositors should be given higher priority than other stakeholders.