Account In National Co-Operative Bank? Last Date To Submit Deposits Insurance Claims Up To Rs 5,00,000 Nears

The National Co-operative Bank, based in Bengaluru, came under RBI's radar last month which led the central bank to ban banking transactions in this bank. However, RBI had declared a relief to depositors of the bank to claim their entitled deposits amount maximum up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation. DICGC has notified on its website that the last date to submit their deposit insurance claims is due on September 7, 2023. The payment of the claims will be carried out in October.

On July 26, DICGC said, it would be making payments to the eligible depositors of the captioned bank (The National Co-operative Bank Ltd., Bengaluru), in terms of Section 18A of the DICGC Act, 1961, subject to submission of the claim list by the bank concerned, in such form and manner as prescribed by DICGC within the statutory timeline of 45 days i.e., by September 07, 2023.

Here's what depositors should know:

According to the DICGC, depositors of National Co-operative Bank are advised to submit their deposit insurance claims to the bank. The claims should be supported by officially valid document/s of identity and written consent to receive the amount lying in credit of their deposit (willingness declaration), subject to a maximum of Rs 5 lakh in the same capacity and the same right, along with alternate bank account details into which the said amount will be credited.

It needs to be noted that the willingness submitted shall be construed as applicable for all deposit accounts held by a depositor in the bank.

Further, depositors who have submitted valid documents will be paid by credit to the alternate bank account specified by depositors, or on their consent, to their Aadhaar-linked bank account, subject to the bank abiding by the statutory timelines of claim list submission in terms of Section 18 A (2).

The date for payment by DICGC is scheduled on October 22, 2023.

On July 24, RBI issued certain Directions to The National Co-operative Bank Ltd. From July 24, the bank shall not, without prior approval of RBI in writing grant or renew any loans and advances, make any investment, incur any liability including borrower of funds and acceptance of fresh deposits, disburse or agree to disburse any payment whether in the discharge of its liabilities and obligations or otherwise, enter into any compromise or arrangement and sell, transfer or otherwise dispose of any of its properties or assets except as notified.

Also, RBI set a withdrawal limit of up to Rs 50,000 on the customers' total balance amount across all savings bank or current accounts or any other account at the bank.

However, RBI also directed that the eligible depositors would be entitled to receive a deposit insurance claim amount of his/her deposits up to a monetary ceiling of Rs 5 lakh from DICGC.

Since then, National Co-operative Bank has continued to undertake banking business with restrictions till its financial position improves. RBI may consider modifications of these directions depending upon circumstances.