The revised ceiling will be within the Rs 10 lakh mark.
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.
'We deposited money just yesterday, but they did not say anything...'
Currently, deposits of up to Rs 5 lakh are covered under the deposit-insurance scheme.
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.
One should avoid keeping excessive funds in one's savings account.
'I don't know when I will be able to access those funds.'
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.
Sir Osborne Smith was the first governor of the Reserve Bank, serving from April 1, 1935, to June 30, 1937.
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.
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.
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.
At present, bank depositors get an insurance cover of Rs 1 lakh on their amount by the Deposit Insurance and credit Guarantee Corporation.
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.
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.
The Reserve Bank of India (RBI) on Wednesday allowed payment system providers, prepaid card issuers, card networks and white label ATM operators access to its Centralised Payment Systems (CPS), such as real time gross settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems in the first phase of its plan bring non-banks in the same platform. "Direct access for non-banks to CPS lowers the overall risk in the payments ecosystem.
With disruptions continuing, the productivity of Rajya Sabha fell to 13.70 per cent during the second week of the ongoing monsoon session from 32.20 per cent during the first week, resulting in an overall productivity of 21.60 per cent for the first two weeks.
The much-anticipated cryptocurrency bill, however, is missing from the list, reports Shrimi Choudhary.
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.
Prime Minister Narendra Modi on Wednesday said that the country's economic growth is picking up pace again and the domestic industry needs to enhance its risk-taking appetite. Noting the recent reforms taken by the government, the Prime Minister said that bringing reforms is a matter of conviction for his government, which is ready to take all risks in the national interest. "We have taken bold decisions. Reforms continued even during pandemic. "The government is doing reforms not out of compulsion but out of conviction," he said while addressing the CII's annual meeting.
'The money is readily available to the depositors.'
The Bill when enacted will pave the way for setting up of the Resolution Corporation
'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.
Inching closer to resolving the Punjab and Maharashtra Cooperative (PMC) Bank issue, the Reserve Bank on Monday came out with a draft scheme for takeover of the crisis-hit bank by the Delhi-based Unity Small Finance Bank (USFB). The draft scheme of amalgamation envisages takeover of the assets and liabilities of PMC Bank, including deposits, by USFB, thus giving a greater degree of protection for the depositors, the RBI said. In September 2019, the RBI had superseded the board of PMC Bank and placed it under regulatory restrictions, including cap on withdrawals by its customers, after detection of certain financial irregularities, hiding and misreporting of loans given to real estate developer HDIL.
The economy is gaining traction with gradual pick up in manufacturing activity and moderation in contraction of services, spurred by comfortable liquidity conditions, an RBI article on Tuesday said. Observing that the retreat of the second wave of coronavirus pandemic has been slow, the RBI in an article on the 'State of Economy' said, the aggregate demand conditions are buoyed by the release of pent-up demand post unlock, while the supply situation is improving with the monsoon catching up to its normal levels and sowing activity gaining pace. "Reaffirming the traction that the economy is gaining, the manufacturing activity is gradually turning around, while contraction in services has moderated.
In the aftermath of the PMC Bank mess which was in the RBI's highest rating of 'A' category, trustworthiness of these ratings may be up for a review.
The draft amalgamation scheme of Punjab and Maharashtra Co-operative (PMC) Bank with Unity Small Finance Bank (SFB) allowed quick relief to depositors with savings of up to Rs 5 lakh, but a long wait for those who had their nest egg with the scam-tainted bank. If the scheme gets approved, 96 per cent (or 880,000 of 924,000) depositors will get their full money straightaway after PMC is merged with Unity SFB. According to the draft scheme, retail investors may get up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) instantly, and then some more in phases till they can recall their full deposits after 10 years.
'What is critical today in India is confidence of depositors.' 'If you have these kinds of problems spreading like this, the confidence level of a lot of people in the system gets shaken.'
There will be different ways of returning the money, depending on the profile of the depositors and the amount, predicts Tamal Bandyopadhyay.
Large urban co-operative banks may come to be solely under the provisions of the Banking Regulation Act, even as the smaller among them are to remain within the exclusive fold of the Registrar of Co-operative Societies. The upcoming changes will bring the curtains down on the vexed issue of dual control of UCBs, which has been in vogue for 54 years. The new framework will affect 1,551 UCBs in the country, which had a total business of Rs 7.36 trillion.
The Budget emphasises on capacity building and empowerment of marginalised sections of society including farmers.
the three investors that have submitted their final bids are not commercial banks. Among the three, one is a non-banking financial company. Another distinctive feature of the revival is that PMC may lose its cooperative bank characteristic after its reconstruction.
Mutual funds, bonds, PPFs, equity and real estate are some options which offer varying rates of return.
'The new ceiling will cover around 93 per cent of all deposit accounts, up from 90 per cent earlier,' notes Tamal Bandyopadhyay.
'Clearly, the depositors of cooperative banks need the maximum protection.'
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Cumulatively for the first two quarters till now, the advance tax collections from the Mumbai zone, which contributes over a third of the income tax collections nationally, have grown 11 per cent, the official said.
Your money is protected by the Deposit Insurance and Credit Guarantee Corporation.
With a sole mandate of inflation targeting, RBI wears many hats.
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