Reserve Bank Rings In Big Change For Urban Cooperative Banks

Reserve Bank of India (RBI) Governor Shaktikanta Das indicated that the banking regulator will ring in sweeping regulatory changes to reform urban cooperative banks that have been plagued by a spate of failures, and warned people against parking their savings in banks offering high returns.

While describing the Government’s decision to raise the insured limit for bank deposits to ₹5 lakh from ₹1 lakh with a 90-day time limit to pay out such deposits as ‘landmark’ developments, Mr. Das stressed that the payment of deposit insurance should be seen as a “measure of last resort”.

There are institutions that are offering higher interest rates which are viable, but depositors should always be very careful,” he reiterated at an event to mark the payment of nearly ₹1,300 crore to over 1 lakh depositors whose funds were stuck in distressed banks for years.

Prime Minister Shri Narendra Modi addressed a function on “Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs. 5 Lakh” in New Delhi.