RBI panel for raising deposit insurance cover to Rs500000

RBI panel for raising deposit insurance cover to Rs500000

Mumbai: A Reserve Bank of India (RBI) committee on banking services to retail and small customers has recommended raising the deposit insurance cover five times from 100000 to 500000.

The committee was formed under the chairmanship of former Securities and Exchange Board of India chairman M Damodaran in June 2010 to look into banking services rendered to retail and small customers, including pensioners.

Besides increasing the deposit insurance cover, the committee also recommended the creation of a toll free common bank call number for customer redressal and also asked banks to provide plain savings account without minimum balance.

Minimum balance in banks currently range from 1000 to 25,000. Banks also open no-frill accounts which do not require a minimum balance but such accounts do not offer limited bank services to savings bank customers.

The committee has also suggested a zero liability against loss in ATMs and online transactions and prepaid instruments up to 50,000 for frequent travellers.

RBI has asked public comments on the committee recommendations by 27 August.