Bank deposit insurance hiked to Rs 5 lakh per depositor

The Deposit Insurance and Credit Guarantee Corporation has been allowed to increase deposit insurance coverage to Rs 5 lakh per depositor from Rs 1 lakh, Finance Minister Nirmala Sitharaman said Saturday in her budget speech.

A robust mechanism is in place to monitor the health of all scheduled commercial banks, Nirmala Sitharaman said.

Depositors' money is absolutely safe, she said.

Depositors are currently "insured upto a maximum of 1,00,000...for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank's licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force," according to the DICGC. Click here for more information.

The budget announcement follows a downgraded growth prediction from the International Monetary Fund (IMF).