The RBI will now charge banks different deposit insurance fees based on how risky they are, allowing safer banks to pay less premium.
The revised ceiling will be within the Rs 10 lakh mark.
Ask rediffGURU and PF expert Nitin Narkhede your mutual fund and personal finance-related questions.
India's household debt climbed to 41.3 per cent of gross domestic product (GDP) at the end of March 2025, marking a sustained rise from its five-year average of 38.3 per cent, with consumption-related loans accounting for bulk of the borrowings, the Reserve Bank of India (RBI) said in its Financial Stability Report.
While the economy will wait for a rate cut in December, the banking industry should be happy with the wave of liberalisation -- a big push for growth in bank credit, points out Tamal Bandyopadhyay.
Currently, deposits of up to Rs 5 lakh are covered under the deposit-insurance scheme.
So, the next time someone tempts you with a slightly higher FD rate from a lesser-known bank, point them to hybrid funds that can deliver extra returns without the administrative and emotional rollercoaster.
A strong demand was made in the Lok Sabha to eliminate online betting and gambling applications. YSRCP member Maddila Gurumoorthy urged the government to set up a dedicated task force to take action against betting and gambling apps. He also asked the government to draft regulations for such applications and launch awareness campaigns about the dangers of online betting. Other issues raised included deposit insurance coverage for bank depositors, representation of Scheduled Castes in the Kerala government, challenges faced by nurses, and the need for paramilitary forces in Jharkhand during upcoming Hindu festivals.
'I don't know when I will be able to access those funds.'
At present, bank depositors get an insurance cover of Rs 1 lakh on their amount by the Deposit Insurance and credit Guarantee Corporation.
'The impact of CBDC on deposits and deposit insurance is largely unknown.'
'Choose an FD tenure that provides a balance between returns and the horizon for which you can invest.'
One should avoid keeping excessive funds in one's savings account.
The government would be ironing out issues related to the controversial 'bail-in' clause in the earlier Bill, explore hiking the deposit insurance cover of customers, and decide whether the resolution framework should apply to public sector banks.
'We deposited money just yesterday, but they did not say anything...'
Market downturns or regulatory shifts can reduce liquidity, making it harder to buy or sell assets when needed.
Allocation to bank deposits -- fixed deposits, savings account deposits, and current account deposits -- came down.
If a bank shuts down, every account holder it has will get back their money for a maximum limit of Rs 5 lakh. It was Rs 1 lakh before.
Sir Osborne Smith was the first governor of the Reserve Bank, serving from April 1, 1935, to June 30, 1937.
Longer-tenure FDs generally give higher returns. Nonetheless, going for a tenure higher than two to three years is not advisable.
The bulk of an investor's portfolio should be in shorter-duration funds of up to one year portfolio duration.
rediffGURU Ramalingam Kalirajan answers your personal finance queries.
Customers of stressed Punjab & Maharashtra Co-Operative Bank (PMC Bank) will not get up to Rs 5 lakh insurance cover in the first lot as the multi-state co-operative bank is under the resolution process. Deposit Insurance and Credit Guarantee Corporation (DICGC) in the first lot will pay customers of 20 stressed banks except PMC Bank. For the first lot, the mandatory 90 days period concludes on November 30.
The decision assumes significance in the wake of a scam in the PMC Bank affecting lakhs of customers who are facing difficulties in withdrawing their money due to restrictions imposed by the Reserve Bank of India.
'The new ceiling will cover around 93 per cent of all deposit accounts, up from 90 per cent earlier,' notes Tamal Bandyopadhyay.
The Union Cabinet on Wednesday approved amendment to the DICGC Act to provide account holders access to up to Rs 5 lakh funds within 90 days of a bank coming under moratorium to ensure timely support to depositors. Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank too came under stress, leading to restructuring by the regulator and the government.
This case is the largest investigated by the Pandemic Response Accountability Committee Fraud Task Force to date, US Attorney for the Northern District of Texas Leigha Simonton said in a press release.
She said I treated her like a bachchi. At another moment, she said I had gone to various people and 'bitched' about her. She also threatened to bring the entire matter to the PM's notice. A revealing excerpt from Subhash Chandra Garg's We Also Make Policy: An Insider's Account of How the Finance Ministry Functions.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was on Monday awarded to Ben S Bernanke, Douglas W Diamond, and Philip H Dybvig for their research work on bank regulation and how financial crises should be managed.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) will pay the depositors of 21 stressed cooperative banks, including the Punjab & Maharashtra Co-Operative Bank (PMC Bank), up to Rs 5 lakh within 90 days. The Reserve Bank of India (RBI) had imposed restrictions on the withdrawal of deposits from these banks. Of the 21 banks, 11 are from Maharashtra, five from Karnataka, and one each from Uttar Pradesh, Kerala, Rajasthan, Madhya Pradesh, and Punjab.
The collapse of Silvergate Bank, Silicon Valley Bank (SVB) and Signature Bank in the US might create temporary liquidity issues but will not have any significant impact on the Indian crypto market in the long run, officials from several exchanges told Business Standard. All three banks are considered crypto-friendly. SVB offered services such as cryptocurrency custody and lending.
Instead of only focusing on the tenure for which the best interest rate is available, investors should also focus on their own investment horizon.
The much-anticipated cryptocurrency bill, however, is missing from the list, reports Shrimi Choudhary.
'The banks cannot pass on the hike in premiums to its customers, according to the norms. The premium won't go up substantially in any case and may be hiked to 12-13 paise (per deposit of Rs 100 a year),' Finance Secretary Rajiv Kumar said.
The Bill when enacted will pave the way for setting up of the Resolution Corporation
If you don't have a specific goal, but want intermittent liquidity, then ladder your FDs, that is, invest in FDs of varying maturities, such as one, two, three, five or even 10 years. Laddering ensures FDs mature at regular intervals.
Indian start-ups raised issues, such as blockages in international wire transfers, disruptions due to threshold limits on withdrawals, lack of communication from US agencies, and the need for preferential access to credit, in a meeting with the government over the fallout of Silicon Valley Bank's collapse. Rajeev Chandrasekhar, minister of state for electronics and information technology, held a virtual meeting with over 450 members from start-ups, venture capitalists, and investors who have been directly affected by the closure of SVB. He assured them that the IT ministry would put together a list of suggestions and give it to the finance minister on behalf of start-ups.
Indian start-ups breathed a sigh of relief after the UK government facilitated the acquisition of the now-defunct Silicon Valley Bank's (SVB's) British arm by HSBC. In a bid to allay fears, the US Federal Deposit Insurance Corporation (FIDC) announced recently that it had transferred all deposits of start-up-focused SVB to a newly created bridge bank and all depositors would have access to their money. President Joe Biden also sought to reassure jittery depositors that they can have confidence that the US banking system is "safe".
The difference between what the banks play in the US and India is not that of soccer and football but rugby and football. SVB also has a unique character. But when risks are mispriced, the fallout could be very similar, points out Tamal Bandyopadhyay.
What's different this time is that global financial stress -- which has its genesis in four policy choices made in recent years -- is juxtaposed with a more resilient real economy, observes Sajjid Z Chinoy, chief India economist at J P Morgan.
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