In a major move towards ensuring protection of depositor's hard-earned money, Union Finance Minister (FM) Nirmala Sitharaman said on Friday (15 November) that the Government of India will be bringing in legislation to raise insurance cover on bank deposits from present Rs 1 lakh, reports Economic Times.

FM Sitharaman told the media persons that the Government will be introducing bills for the raising of insurance cover on deposits, as well as for regulation of cooperative banks in the upcoming Winter Session of the Parliament itself.

The move by the Government comes amidst a state of crisis in the scam hit and mismanaged Punjab and Maharashtra Cooperative (PMC) Bank which has inflicted hardships on lakhs of depositors.

It should be noted that the insurance cover on bank deposits have remained stagnant at the figure of Rs 1 lakh for almost three decades as the cover of upto a lakh rupees had been implemented in 1993 when as much as 90 per cent of the bank accounts used to have much lesser sums of money.

The Raghuram Rajan Committee on Financial Sector Reforms 2009 had also recommended strengthening the capacity of the Deposit Insurance and Credit Guarantee Corporation.