Question

In the Union Budget 2020, the Finance Minister announced the hike of bank deposit insurance from ______ to Rs. 5 lakh.
1. Rs. 1 lakh
2. Rs. 3 lakh
3. Rs. 4 lakh
4. Rs. 2 lakh

Answer 1

Correct Answer - Option 1 : Rs. 1 lakh

The correct answer is Rs. 1 lakh.

• In the budget of FY 2020, Finance Minister Nirmala Sitharaman has announced to increase the bank deposit insurance in scheduled commercial banks from Rs. 1 lakh to Rs 5 lakh per depositor.

• This has been done to improve the security of public funds.
• This means that depositors will get back rupees 5 lakh maximum if the bank closes down.
• This is the first time in 27 years that this limit has been revised.

• This came into consideration after Punjab and Maharashtra Co-operative Bank (PMC Bank) whose headquarters is in Mumbai came under the scrutiny of RBI.
• The last time this revision was made in 1993 to Rupees 100000.