Union Minister of Commerce and Industry Piyush Goyal on Sunday said that the Central government has increased the bank deposit insurance cover, in case of problems occurring such as closure, from Rs 1 lakh to Rs 5 lakh. The amount has to be refunded to the depositor within 90 days.

Addressing "Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs. 5 Lakh" programme here, Goyal said, "Earlier there used to be a bank deposit insurance cover of Rs 1 lakh for the deposit of the same amount or more under the 'Deposit Insurance Credit Guarantee Scheme'. It took nearly 10 years. When Prime Minister Narendra Modi was the Chief Minister of Gujarat, he had written to the then Prime Minister Manmohan Singh to extend this limit to Rs 5 lakh. The then government did not do it."

"Now, if a person faces any problem or setback for all of his deposits in a bank, and if the bank is incapable of returning the deposit, then the depositor will get a refund of Rs 5 lakh," he added.

Goyal highlighted that the deposited money will be refunded to the depositors within 90 days of the closure of the bank.

"The most important thing is that earlier it used to take nearly 10 years, now it has been ensured that the day on which the Reserve Bank of India decides to shut down the bank, the sum of Rs 5 lakh will be refunded to the depositors' account within 90 days of the closure of the bank," he said.

The Minister said that the reduction in the number of days would save the loss of interest that the depositors bore during the 10 years in the earlier system.

"Earlier if you got Rs 1 lakh after 10 years, you bore the loss of interest for those number of years. Now, the time duration has been reduced to 90 days, so there will not be a loss of interest either," he said.

The Union Minister further said that the programme gives the largest coverage to the depositors in the world stretching up to 98 per cent of the people.

"If we take a look at the banking system in the entire world, the depositors of India are given the largest coverage that extends to covering 98 per cent of the people. There are 252.6 crore deposit accounts in the country today. Many people keep multiple deposits in various banks. 247.8 crore have less than Rs 5 lakh. In this case, if there is any problem, they will get their entire money as a refund," Goyal said