Bank Depositors Protection Act

Bank Depositors Protection Act

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Jaideep Dharadhar started this petition to The Prime Minister of India and

Protection of Bank deposits is the most essential service that a Government has to provide.Protection of deposits in Indian banks is reasonable compared the world at Rs. 5 lakh per (about $ 7,500) bank account but reforms are needed.

In India deposit insurance is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC) which collects a premium of 0.05% on the entire outstanding amount. This means that a bank whose deposits are largely  high value ends up paying premium on even that portion of deposits that are not covered.Thus 100% insurance is possible.

The processes that are being followed to safeguard the depositors if there is a failure of the bank don' t make sense.There is an unnecessary wait for the bank to be liquidated after a lengthy claim process, extending upto years which can be easily avoided by taking an immediate advance from the DICGC.

Even the Insolvency and Bankruptcy Code ( IBC) provides a maximum of 330 days for a resolution, then why does the process of liquidation or revival and settlement of all claims of depositors, when a bank fails take so long.There has to be a deadline.The time frame has to be even shorter.

Further even if a bank fails because of NPAs  it is the duty of the Government to take over those assets as part of poverty alleviation and wealth creation.This should be given precedence over infrastructure development as a Bank failure affects lakhs of people instantly.The depositors of Banks to which RBI has given restriction notice should be allowed to form groups and  participate in auctions with their outstanding adjusted against their deposits.Countries like Spain and Ireland have demonstrated it by taking over NPA's.

Thus please address this issue and give 100% insurance to bank deposits by passing such an Act in Parliament/Legislature or passing such a notification by RBI.

We hope that the voice of the common man will be 

heard by the passing of this Act.

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At 200 signatures, this petition is more likely to be featured in recommendations!