Insurance security can be found on deposits of more than one lakh

Now the government claims that under the proposed law, insurance protection will continue, as well as the resolution corporation will have the right to increase the amount of insurance.

New Delhi: Insurance cover for deposits of more than one lakh rupees can be got. The Finance Ministry has given these signals in its cleanliness about the proposed Financial Resolutions and Deposit Insurance (FDR) bills. 

These bills are currently under consideration of the Parliamentary Committee. The committee has proposed to present its report on the last day of the budget session. There is a dispute about some provisions of this bill, especially the provisions related to insurance protection. It is also feared that if a bank drops after the law of the bill, then it can use the money of the depositors to repay its debt. The government is continuously working to overcome these fears and in this regard, again, the clarification was issued on Tuesday. 

Insurance protection on deposit

Under the existing rules, insurance cover is up to Rs. 1 lakh. It means that if a bank gets immersed, one lakh rupees is received immediately, regardless of the total amount of the deposit. The remaining amount can be claimed, but it will be treated as a unsecured creditor, which is the same as the claims of unsecured creditors. In other words, if a bank or financial institution is submerged, after paying all the liabilities, if the money is left over, then the deposit amount above Rs 1 lakh will be recovered.

Now the government claims that this will not happen after the new bill becomes law. Under the proposed law insurance protection will continue, as well as the resolution corporation will have the right to increase the amount of insurance. Also, the claims of non-default depositors will be put on top of unbearable creditor and government dues. Meaning of depositors' claims in payment of money by selling the property of the financial institution or bank, which will be given special attention. In other words, there will be no risk of submerging

Bell In Provision
In the disputes, a provision is associated with 'Bell In'. It is being said that when the provision is implemented, the amount deposited in the submerged bank may be used for other purposes and without the approval of the depositors also. In other words, a perception is being made that you will not get your money in the event of drowning the bank, but it can be used to fulfill other liabilities. But the government claims that it is completely wrong. The biggest thing is that the use of this provision may not necessarily be used. In the case of government banks, it is almost unheard of, because the government banks are not at risk of sinking. 

What is the objective bill
According to the bill's objectives introduced in the Lok Sabha, at the moment of the failure of financial services providers such as a bank or insurance company, there is a clear process lacking and proposed legislation will be able to cater to this shortage. However, the Banking Act 1949 Some provisions of the laws such as Reserve Bank of India Act 1934, Insurance Law 1938, Life Insurance Corporation Act 1956 and State Bank of Canon 1955 help, however, that if financially Whether or not the organization that sends, what can be done after that? What is meant here is how the interests of creditors and depositors can be protected. The main objectives of the bill are as follows: 

a. Formation of a Resolution Corporation. This corporation will have the right to transfer assets of a financial company drowning under the decision of the National Company Law Tribunal and a strong institution. 

B.Assign some financial institutions to Systemically Important Financial Institutions. These will be those institutions which will have a great effect on the entire financial system in the event of its drowning. 

C. Establishment of special fund which will provide insurance cover on the deposit. Through the fund, the rest of the expenses will be settled. 

D. Finishing Deposit Insurance and Credit Guarantee Corporation Act, 1961 (This is the provision, due to which it was feared that the insurance security will not get up to Rs 1 lakh in the event of the drowning of backs) 

why it is necessary for the new bill
There is a great difference in the drowning of a common company and a financial institution. When a common company drowns, its impact mainly depends on its creditors, but if a financial institution is sunk then its effect is quite wide, because it is possible that there is enough money in the financial institution to accumulate money. Now if the common method of declaring bankruptcy of such a financial institution is time consuming, it can be time consuming and due to which the common people will suffer losses, there can also be a great effect on the financial system.

It is a matter of note that the new bankruptcy law 2016 does not come in the form of self financed financial services companies. In view of this, the FRAI bill has been brought into consideration. The Government expects that the proposed law, along with bankruptcy law, will be able to provide a comprehensive settlement mechanism to the entire economy, under which public funds can be protected and the interests of the public funds and customers of specialized service providers.

The government says that there is no change in government guarantee on its guarantee. However, the government banks have adequate capital and the law and order is also strong for them. The bank is not submerged and the interests of the depositors have been protected, due to which many necessary steps are being taken. In spite of all this, if the bank is immersed in exceptional circumstances, it will be possible to provide fast and effective solution to the interest of depositors through proposed legislation