Context:
Thousands of depositors will suffer as a result of RBI’s recent restrictions on New India Co-operative Bank due to an alleged fraud of ₹122 crores. Withdrawing deposits has been frozen by the Reserve Bank of India, leaving most depositors uncertain of their savings. However, these depositors can claim deposits up to ₹5 lakh under deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC), which has already commenced the claim process.
Key Highlights:
- Action of RBI and Its Effect
- At the same time as its withdrawal, the RBI imposed restrictions on the bank, which suspended the withdrawals for six months after a complaint of fraud was registered with the Economic Offences Wing of Mumbai Police.
- 90% of depositors numbering around 130,000 are covered by the DICGC insurance scheme, which has already begun to be claimed by a May 14 deadline for submissions, the cutoff date for submission being March 30.
- Relief of Deposit Insurance
- Most of the depositors have already lodged their claims or at least are in the process of lodging them, while some will have to wait three months for their money-back.
- Most depositors find relief through the insurance scheme, which has once again kept the hopes alive among depositors, for a channel has opened up through which they can get back their deposits up to Rs 5 lakh.
- Worries of Deposit Holders
- Angry with the RBI timelines, affected depositors, especially seniors and others who depend on monthly withdrawals, express concern over emergencies that may arise, particularly medical bills.
- Fraud Allegations and Legal Action
- Hitesh Mehta, a general manager of the bank, has been nabbed in connection with participation in the alleged fraud. Now, customers need to look for different banking options as they juggle their blocked funds.
So there is some solace for unhappy customers in deposit insurance, but still like many other people they fight an uncertain future about when it could be possible to access their funds and the inconveniences that arise from delays in processing claims. In other words, it raises worries concerning the bank’s oversight in these accounts and the fate of depositors in particular.
