Safe deposits

The insurance limit must be increased substantially

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As reported by this newspaper on Monday, the Union government is considering increasing the limit for bank-deposit insurance from the current level of ₹5 lakh. Although the final decision has not yet been taken, the limit might be doubled to ₹10 lakh. Deposit insurance is provided by the Deposit Insurance and Credit Guarantee Corporation, which covers all forms of deposits in commercial and co-operative banks. The fact that the government is mulling over increasing the ceiling for deposit insurance must be welcomed. As things stand, although about 98 per cent of accounts in insured banks are covered, only about 43 per cent of the accessible deposits are protected. Thus, increasing the limit of insurance will make deposits safer.