Deposit Insurance Corporation faces claim of around ₹14,000 crore

Mumbai: The Deposit Insurance and Credit Guarantee Corporation (DICGC) faces a total claim of about ₹14,000 crore from defaulting co-operative banks, including PMC Bank, but all the claims may not materialise at the same time and some may even revive.

“It needs to be noted that the banks which are under direction/ weak will go under liquidation over a period, not together at a particular point of time. Weak banks may also witness a revival,” said RBI.

The extent of devolvement on DICGC in the event of all the banks ‘under direction’ or weak banks going into liquidation/ ordered to be wound up, would be ₹14,098 crore as of end September, 2019.

The break-up would be ₹3,414 crore in the case of state cooperative banks, district central cooperative banks and ₹10,684 crore in the case of urban cooperative banks, including PMC Bank.

DICGC came into limelight since the RBI imposed deposit withdrawal restrictions on PMC Bank. As a percentage of the deposit insurance fund, these deposits are about 13.9%, the RBI said.

Source: The Economic Times