Govt proposes insurance cover for deposit fraud

India Infoline News Service | Mumbai |

The objective is to protect investors from fraudulent money-collection schemes.

The government on Tuesday proposed compulsory insurance cover for public deposits collected by companies and penalty of up to 18% annual interest for defaulters.

The objective is to protect investors from fraudulent money-collection schemes.

The companies will make the premium payments for the deposit insurance cover. A penalty of 15% interest rate will be levied annually on those companies which do not provide a deposit insurance to their depositors.

Under the deposit insurance scheme, the companies would need to sign a contract to insure the total principal amount as also the promised interest component for the depositors.


 

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