Finance ministry is considering proposals to increase the insurance limit from the current ₹1 lakh on deposits in banks, union minister for finance Nirmala Sitharaman said.
The government is considering introducing legislations in the winter session of Parliament to raise the ₹1-lakh insurance cover limit for greater protection of depositors’ money in banks and regulate multi-state co-operative banks, and is reviewing ways to address concerns of distressed telecom operators, finance minister Nirmala Sitharaman said on Friday.
“Finance ministry is considering proposals to increase the insurance limit from the current ₹1 lakh on deposits in banks. If (the Union) cabinet approves, we would like to move amendments in the upcoming winter session,” she said.
She, however, declined to give the proposed new limit pending a final decision on this matter. Hindustan Times on Monday wrote about the government’s move. The limit has not been revised since 1993, when it was increased from ₹30,000. According to officials, raising the amount to ₹2 lakh can adequately protect about three-fourths of the existing account-holders.
Sitharaman said the government will also amend “necessary acts” for better regulation of co-operative banks so that they follow prudential norms of the Reserve Bank of India (RBI) and a Punjab and Maharashtra Co-operative Bank (PMC)-kind of crisis can be avoided.
“Unless prudential norms are applied (to co-operatives taking deposits) many of the things emerging in the light of the PMC could not be addressed. To make sure no such PMC further happens, there will be legislative backing to deal with such kind of events,” she said.
The finance minister said she is in regular touch with the RBI to address concerns of PMC Bank’s depositors.
Speaking about the stress faced by telecom companies, she said besides BSNL and MTNL, the government is also concerned about private telecom firms.
The finance minister said the government’s intent is to address concerns of all those who have approached it with serious concerns, including the private telcos, whose concerns are the fallout of the Supreme Court’s decision, where the verdict is in the government’s favour.
“I want no company to shut its operation; I want everyone to be able to be up and running. We want the economy to have good number of companies in business and flourish in their business. Not just telecom sector, my wish is all companies in all sectors be able to do business, service their market, customers and survive… With that approach, the finance ministry is always been talking (to the industry, including the telecom sector).”
Private telecom firms—Vodafone India and Airtel—have posted a combined quarterly loss of about ₹74,000 crore after making provisioning for some statutory dues as per the Supreme Court’s order.
She said the government is not rushing to account for the money due from the telecom operators and a committee of secretaries is looking into the matter.
Speaking about the economy, she said the government has taken several steps since August this year to boost growth and she is hopeful about their impact. Sitharaman, however, added that it was too early to say if the slowdown in the economy had bottomed out.
The Indian economy grew by 5% in the three months ended June, the slowest rate of growth in 25 quarters. In recent weeks, many financial institutions and agencies have revised downward their estimates of growth for 2019-20. For instance, Moody’s Investors Service cut India’s economic growth forecast for the current year to 5.6% from 5.8% and State Bank of India pared its projection to 5% from 6.2%.
Sitharaman said the GST collection in November is expected to be “good” and positive growth is seen in the direct tax collections.