New Delhi. Reserve Bank of India (RBI) Governor Shaktikanta Das on Sunday cautioned depositors against high returns. Das has cautioned the investors that they need to be careful in the quest to get high returns. Das said in the program ‘Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs 5 lakh’ on Sunday that high returns also carry high risk.
Das said, “The risk is also high, so investors need to be careful with the desire to get high returns. The Reserve Bank is committed to ensuring the strength and combative capability of the banking system.”
5 lakh insurance is available on your money deposited in the bank
Explain that the government has increased the bank deposit insurance cover from Rs 1 lakh to Rs 5 lakh. The security of deposits up to Rs 5 lakh in banks is guaranteed by the Deposit Insurance and Credit Guarantee Corporation (DICGC). DICGC is a subsidiary of RBI.
How does deposit insurance work?
As per the DICGC guidelines, each depositor in the bank is insured up to a maximum of Rs 5 lakh for the amount of principal and interest with him on the date of cancellation of the bank’s license or on the day of merger or reconstruction. This means that no matter how much money is deposited in all your accounts in a single bank, you will get an insurance cover of only Rs 5 lakh. This amount includes both the principal amount and the interest amount. In the failure of the bank, if your principal amount is Rs 5 lakh, you will only get this amount back and no interest.
