The Reserve Bank of India (RBI) has said Indian depositors enjoy a high degree of protection. About 93 per cent of deposit accounts and 61 per cent of total deposits in the country are fully protected, the central bank said on Wednesday in its ‘Report on Trend and Progress of Banking in India 2007-08,’ citing March-end data.
Each deposit is protected only up to Rs. 1 lakh. But the protection level is higher than recommended by the International Monetary Fund (IMF). The IMF’s recommendation is to provide 80-90 per cent of depositors and 20 per cent of total deposits.
Commercial banks in India have over 52 crore deposit accounts and had Rs 31,92,141 crore of deposits at the end of March, 2008. The total deposits with commercial banks as on November 28 amounted to about Rs 36.5 lakh crore. Apart from commercial banks, the deposit insurance cover is provided to deposits with Regional Rural Banks (RRBs), local area banks (LABs) and cooperative banks. The Deposit Insurance and Credit Guarantee Corporation has been extending insurance cover to small depositors to maintain confidence and promote financial stability.
The number of registered insured banks at the end of October 2008 was 2,354 comprising 78 commercial banks, 92 RRBs, 4 LABs and 2,180 co-operative banks.