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when the crisis finally ends. In what may come as a surprise for many, the claims paid under the deposit insurance and credit guarantee corporation (DICGC) scheme include the interest accrued on the deposits too. So, the principal amount along with the interest up to Rs 1 lakh total shall be returned by the way of insurance. The DICGC covers all deposits to an upper limit of Rs 1 lakh.
As per the rules, if a depositor had left Rs 90,000 when the bank faced a restriction on withdrawals, and an interest of Rs 10,000 accrued in the meantime, the person would get Rs 1 lakh in all, said liquidator JK Thakur, who took charge on Thursday. The bank offered rates as high as 10-12%, so there are chances that many depositors shall get substantially higher amounts than what they had invested. Many of them had only hoped to get the principal back, and had given up hope about the interest. The amount paid on hardship grounds will be deducted from the payable sum.
Thakur said his first priority will be to settle the claims under the DICGC scheme. Out of 61,000 depositors in all, 59,500 have a claim within Rs 1 lakh. The bank's total deposits stand at around Rs 71 crore. It would take around 2-3 months to submit the claim after calculating the interest till the date the bank's licence was cancelled on August 30, 2009. The interest up to June 30, 2009, has already been calculated. There are certain agencies offering services in this sector, which may be hired for faster processing, said Thakur.
As far as the remaining amount is concerned it would be recovered by selling assets and recovering money from borrowers, Thakur said.
The fine print of deposit insurance
NAGPUR: If a single individual has different deposit accounts in his name, then all such funds held in the same type of ownership in the bank are added together while determining the insurance claim. This means that if an individual has three deposit accounts having Rs 1 lakh in each, then only Rs 1 lakh will be compensated.
However, if the funds are held in different types of ownership, or are deposited into separate banks, they would then be separately insured. For example if a depositor `Pandit' also opens other deposit account in his capacity as a partner of a firm, guardian of a minor, director of a company, trustee of a trust, or a joint account with his wife in one or more branches of the bank, then such accounts are considered as held in different capacity and different right. Accordingly, such deposits accounts will also enjoy the insurance cover up to Rs 1 lakh separately, says the section of frequently asked questions (FAQs) on the DICGC website.
If more than one deposit accounts (savings, current, recurring or fixed deposit) are jointly held by individuals in a bank, where their names appear in the same order, then all these accounts are considered as held in the same capacity and in the same right. Then again, all these accounts will be aggregated as one, and a limit of Rs 1 lakh will apply.
However, if individuals open more than one joint accounts, in which their names are not in the same order, then there is a separate compensation for each account. There is a separate insurance if the group of persons in joint accounts are different too. At the same time the bank can also adjust its dues payable by the depositors before paying the insurance amount, says the website.
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