Image Source : ANI M Nagaraju – Secretary at the Department of Financial Services.
New India Co-operative Bank scam: Days after the Reserve Bank of India (RBI) superseded New India Co-operative Bank’s board and barred it from allowing customers to withdraw funds from their deposit accounts, offering new loans, deposits, and making investments, M Nagaraju – Secretary at the Department of Financial Services – said that the government is actively considering raising the deposit insurance scheme limit beyond Rs 5 lakh
“As and when the government approves, we will notify it. This is under the consideration of the government,” the top official told reporters at a press conference in Mumbai when asked to respond to the crisis-hit New India Co-operative Bank.
However, Nagaraju refrained from commenting on the status of the Mumbai-headquartered bank, which is in deep stress. Long queues were seen outside its Mumbai branch to withdraw funds from their deposit accounts after RBI’s decision.
“RBI is seized of the matter… we are not going to comment on that,” he said.
Deposit insurance, as we know it today, was introduced in India in 1962. India was the second country in the world to introduce such a scheme, the first being the US in 1933.
Eligible depositors are entitled to receive deposit insurance claim amounts of their deposits up to a monetary ceiling of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) after due verification. With effect from February 4, 2020, DICGC raised the limit of insurance cover for depositors from Rs 1 lakh to Rs 5 lakh.
Meanwhile, Mumbai police has arrested Hitesh Mehta, General Manager and Head of Accounts of the New India Cooperative Bank, for allegedly misappropriating Rs 122 crore from the bank.
Mehta was placed under arrest by the Economic Offences Wing (EOW) of the city police after being questioned for more than three hours, an official said.
Mehta will be produced before a local court on Sunday, the police official added.
