The Reserve Bank of India employees unions have unanimously passed a resolution seeking the government’s intervention in hiking the deposit insurance cover to ₹10 lakh from the existing ₹1 lakh.
The recent crisis at the Punjab & Maharashtra Cooperative (PMC) Bank had brought this issue to the fore, since the depositors were on the streets demanding that their deposits be returned to them. Many of the depositors in the PMC Bank are ordinary people with their life’s savings struck in the bank. Though the RBI had indicated that even with the ₹1 lakh limit, around 80% of the depositors would stand covered, there has been a vociferous demand from many quarters that the present limit of ₹1 lakh is too low and was fixed in 1993. The Reserve Bank Employees Association has also said that the existing limit is too low when compared to the amounts fixed by some of the other countries as well. They have referred to Russia and Brazil where the amounts are equivalent of ₹12 lakh and ₹42 lakh respectively.
Finance Minister Nirmala Sitharaman had also indicated that the government was favourably inclined towards introducing a legislation to increase the limit. The debate going around was whether it should be hiked to ₹5 lakh or ₹10 lakh. The government may bring the necessary amendment bill in this session of Parliament itself.
Now, the employees in the central bank have made this suggestion that it should be the higher amount. Many people had blamed the RBI officials for the PMC fiasco since their audit teams had failed to notice the wrongdoings of the cooperative bank’s management.
The unions have now placed one more demand that the monitoring and regulation of the urban cooperative banks, which is being done now by the state governments and the RBI, should be completely left to the care of the RBI.