DICGC Settles Claims Worth Rs 8,516 Crore In FY22

The Deposit Insurance and Credit Guarantee Corporation (DICGC) settled claims of Rs 8,516.6 crore in the last financial year and bulk of them were from customers of the Punjab and Maharashtra Co-operative (PMC) Bank, the Reserve Bank said on Tuesday.
     
An amount of Rs 3,791.6 crore was provided to Unity Small Finance Bank for making payment to the depositors of the erstwhile PMC Bank, the Reserve Bank of India (RBI) said in Trends and Progress in Banking Report for FY22.
    
The total settlement amount includes claims settled with respect to 22 urban cooperative banks under the 'All Inclusive Directions (AID)' amounting to Rs 3,457.4 crore, the report said. Main claims and supplementary claims in respect of 15 UCBs amounting to Rs 1,225 crore were also settled.
     
The report said the financial performance of UCBs, which accounted for a bulk of the DICGC claims, showed an improvement in FY22 which was evident in their higher capital buffers, decline in gross non performing assets ratio and improved profitability indicators.
     
DICGC is now empowered to disburse to depositors of these banks a sum of up to Rs 5 lakh each, within a period of 90 days. An insured bank is required to submit its claim within 45 days of imposition of AID after which the DICGC is required to get the claims verified within 30 days and pay the depositors within the next 15 days.
     
With the current limit of deposit insurance in India at Rs 5 lakh, 97.9 per cent of total accounts were fully protected at end-March 2022 as against the international benchmark of 80 per cent, the report said.
    
In terms of amount, 49 per cent of assessable deposits were covered by insurance as against the international benchmark of 20 to 30 per cent, it added.
     
The DICGC builds up the Deposit Insurance Fund (DIF) through transfer of its surplus, i.e. excess of income (mainly comprising premium received from insured banks, interest income from investments and cash recovery out of assets of failed banks) over expenditure (payment of claims of depositors and related expenses) each year, net of taxes.
     
The overall fund stood at Rs 1,46,842 crore as on March 31, 2022, and is yielding a reserve ratio of 1.81 per cent.