Wondering how DICGC's 5 Lakh assurance works ???

[Souvik]

Wondering how DICGC's 5 Lakh assurance for your savings account works???? How do you get back your money if there is a run on the bank ???

Here is a practical case study of PMC Bank, which is now taken over by Unity Bank, and the repayment schedule is likewise. Remember all these re-structuring of banks take time and so delays can be unpredictable.

If you had balance below 5L in PMC bank: (You can get back your money back quick subject to DICGC approval)



For 5L to 15 L Balance, this looks more like a LIC plan, where you forget time value of money !


More than 15L, this is more of a complex derivative instrument with meagre payouts !!!!


Source: https://theunitybank.com/docs/Retail_Depositor_Letter.pdf

 

[Wealth is my birth right!]

As long as the bank is being merged no role comes into effect by that insurance as our funds will be given/shown in account by new takeover entity.

 

[Souvik]

As long as the bank is being merged no role comes into effect by that insurance as our funds will be given/shown in account by new takeover entity.

Bank mergers and corporate actions takes its own sweet time to happen. So if you need money urgently, this insurance may not come in handy. Its best to open multiple accounts in multiple banks (maybe a few abroad denominated in USD or EUR or GBP) so that if one bank goes down or one country goes for war we can survive on other accounts.

 

[Wealth is my birth right!]

Bank mergers and corporate actions takes its own sweet time to happen. So if you need money urgently, this insurance may not come in handy. Its best to open multiple accounts in multiple banks (maybe a few abroad denominated in USD or EUR or GBP) so that if one bank goes down or one country goes for war we can survive on other accounts.

That’s the diversity every investment needs👍

 

[blacktiger]

inflation will chew up the interest rate 2.75. better to open multiple banks and make sure the balance dont reach 5L