Budget 2020: Insurance cover for bank depositors to be raised to Rs 5 lakh, says Sitharaman

New Delhi, Feb 01: Insurance cover for bank depositors to be raised to Rs 5 lakh from Rs 1 lakh, said finance minister Nirmala Sitharaman.

The cover was raised from Rs 30,000 to Rs 1 lakh in 1993, and now after the collapse of Punjab & Maharashtra Co-operative Bank, there was a demand that the limit should be increased.

According to existing Reserve Bank of India rules, in case of a bank failure each of its depositors is insured up to a maximum of Rs 1 lakh for both principal and interest amount.

The cover of Rs 1 lakh is irrespective of the deposit held by the customer in the savings or fixed deposit account.