Senator Salim Mandviwala presided over a meeting of the Senate Standing Committee on Finance, during which the Deposit Protection Corporation Amendment Bill 2024 was reviewed.
In the meeting, the Deputy Governor of the State Bank informed committee members that the proposed amendments would enhance the legal protection for bank deposits. Under the new provisions, deposits up to Rs500,000 will be safeguarded, an increase from the previous limit of Rs250,000.
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Deposit protection schemes are crucial financial safety mechanisms designed to protect depositors’ funds in the event of a bank’s failure. These schemes aim to mitigate the risk of individual bank failures escalating into broader financial instability or systemic crises. By ensuring that depositors can recover a portion of their funds, these schemes help maintain public confidence in the banking system and prevent panic withdrawals that could potentially lead to a wider banking crisis.
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