Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021 received the assent of the President on the 13th August, 2021.
An Act further to amend the Deposit Insurance and Credit Guarantee Corporation Act, 1961.
BE it enacted by Parliament in the Seventy-second Year of the Republic of India as follows:—
- (1) This Act may be called the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021.
(2) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint.
- In section 2 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (hereinafter referred to as the principal Act),
(i) in clause (f),
(a) in sub-clause (viii), for the words “competent Court”, the words “competent Court; or” shall be substituted;
(b) after sub-clause (viii), the following sub-clause shall be inserted, namely:—
“(ix) in respect of which any direction, prohibition, order or scheme referred to in sub-section (1) of section 18A is issued or made;”;
(ii) in clause (ff),
(a) in sub-clause (viii), for the words “in a State.”, the words “in a State; or” shall be substituted;
(b) after sub-clause (viii), the following sub-clause shall be inserted, namely:—
“(ix) in respect of which any direction, prohibition, order or scheme referred to in sub-section (1) of section 18A is issued or made;”. - In section 15 of the principal Act, in sub-section (1), in second proviso, for the words “Provided further that”, the following words shall be substituted, namely:—
“Provided further that the Corporation may, having regard to its financial position and to the interests of the banking system of the country as a whole, and with previous approval of the Reserve Bank of India, from time to time, raise the aforesaid limit of fifteen paisa per annum for every hundred rupees of the total amount of the deposits in that bank:
Provided also that”. - After section 18 of the principal Act, the following section shall be inserted, namely:—
“18A. (1) Where, in respect of an insured bank,—
(i) any direction is issued or any prohibition or order or scheme is made under any of the provisions of the Banking Regulation Act, 1949; and
(ii) such direction, prohibition, order or scheme provides for restrictions on depositors of such bank from accessing their deposits, then, without prejudice to the provisions of sections 16 to 18, the Corporation shall, on the date on which such direction, prohibition, order or scheme takes effect, become liable to pay to every such depositor an amount equivalent to the amount payable by the Corporation to the depositor under section 16.
(2) A list showing the outstanding deposits of each depositor of the insured bank, as on the date on which the direction, prohibition, order or scheme referred to in sub-section (1) takes effect, shall be furnished by such insured bank within forty-five days of such date of effect, in such form and manner as may be specified by the Corporation and certified to be correct by the chief executive officer of the insured bank.
(3) The Corporation shall, within thirty days of the date of receipt of the list under sub-section (2), verify, through an online platform, to the extent possible, or in accordance with such procedure, as may be prescribed, the genuineness and authenticity of the claims made therein, and ascertain the willingness of each depositor to receive the amount due to him out of his deposit in the insured bank.
(4) Subject to the provisions of sub-section (7), the Corporation shall, before the expiry of fifteen days from the date of completion of the verification under sub-section (3), pay to the depositors who have affirmed their willingness thereunder, the amount payable under sub-section (1) either directly, or get it credited in the account of the depositors through the insured bank:
Provided that the total period of time between the date when the Corporation becomes liable to pay to the depositor and the date of payment to the depositor shall not, subject to the provisions of sub-section (7), exceed ninety days:
Provided further that any amount paid by the insured bank to the depositor during the period between the date on which the direction, prohibition, order or scheme referred to in sub-section (1) takes effect and the date of payment to the depositor, shall be appropriately reckoned by the insured bank before crediting such amount in depositor’s account.
(5) Any amount paid by the Corporation under sub-section (4) in respect of a deposit shall, to the extent of the amount so paid, discharge the insured bank from its liability to the depositor in respect of that deposit, but the insured bank shall become liable to the Corporation in respect of the amount paid by the Corporation.
(6) Where, in respect of an insured bank,—
(i) any direction, prohibition, order or scheme under any of the provisions of the Banking Regulation Act, 1949 providing for suspension of business of the insured bank is already in force as on the date of commencement of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021; and
(ii) such direction, prohibition, order or scheme provides for restrictions on the amounts to be paid by the insured bank to each of its depositors, then, notwithstanding anything contained in any other law for the time being in force, the Corporation shall, on and from the date of commencement of the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act, 2021, become liable to pay to each depositor of such insured bank, an amount equivalent to the amount payable by the Corporation to the depositor under sub-section (1) of section 16, and the time limit specified in subsections (2) to (4) herein for such payment shall be computed from that date.
(7) Notwithstanding anything contained in sub-sections (1) to (6), in cases where,—
(a) the Reserve Bank finds it expedient in the interest of finalising a scheme of amalgamation of the insured bank with other banking institution or a scheme of compromise or arrangement or of reconstruction in respect of such insured bank, and communicates to the Corporation accordingly, the date on which the Corporation shall become liable to pay every depositor of such insured bank may further be extended by a period not exceeding ninety days;
(b) the restrictions on payment to depositors are removed by the Reserve Bank at any time before payment to depositors by the Corporation under sub-section (4), and the insured bank or the transferee bank is in a position to make payments to its depositors on demand without any restrictions, the Corporation shall not be liable to make payment to the depositors of such insured bank.
- In section 19 of the principal Act, after the word and figures “section 18”, the words, figures and letter “or section 18A” shall be inserted.
- In section 20 of the principal Act, after the word and figures “section 18”, the words, figures and letter “or section 18A” shall be inserted.
- In section 21 of the principal Act,—
(i) in sub-section (1), after the word and figures “section 18”, the words, figures and letter “or section 18A” shall be inserted;
(ii) in sub-section (2), in clause (b), after the words and figures “the scheme referred to in section 18”, the words, figures and letter “or the direction, prohibition, order or scheme referred to in section 18A” shall be inserted;
(iii) after sub-section (2), the following sub-sections shall be inserted, namely:—
“(3) The Corporation may defer or vary the time limit for receipt of repayments due to it from the insured bank or the transferee bank, as the case may be, for such period and upon such terms, as may be decided by the Board in accordance with the regulations made in this behalf:
Provided that such regulations shall also provide for prudential principles to assess the capability of the bank to make repayment to the Corporation and for prohibition of specified other classes of liabilities from being discharged by the insured bank or the transferee bank till such time as repayment is made to the Corporation.
(4) In case of any delay in repayment to the Corporation beyond the time period prescribed under sub-section (2) or extended under sub-section (3), the Corporation may charge penal interest at a maximum rate of two per cent. above the repo rate per annum for the amount to be repaid to the Corporation and such penal interest shall rank equally for priority with the amount to be repaid under sub-section (2).”.
