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RBI, banks to adopt risk management system

DICGC may, with regard to its financial position and to the interest of the banking system of India, increase the limit of deposit insurance cover

May 09, 2012 4:04 IST | India Infoline News Service

Finance minister Pranab Mukherjee has asked the Reserve Bank of India (RBI) and Deposit Insurance and Credit Guarantee Corporation (DICGC) to adopt risk management system before doubling theinsurance cover for bank deposits to Rs. 20 million.

Mr Mukherjee in a written reply to the Rajya Sabha said that the proposal of the DICGC for increasing the deposit insurance cover for banks from Rs. 10 million to Rs. 20 million has been examined. According tothe existing norms of DICGC, a wholly-owned subsidiary of the RBI, a maximum ofRs. 10 million is paid to a depositor in case a bank goes insolvent.

Mr Mukherjee said, DICGC may, with regard to its financial position and to the interest of the banking system of India, increase the limit of deposit insurance cover. The limit can be raised by DICGC with the prior approval of the union government.

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