Budget 2020: Joy for bank customers! Insurance cover on bank FDs, deposits increased to Rs 5 lakh

Budget 2020: The government on Saturday increased the limit of insurance cover in case of bank failure on deposits to Rs 5 lakh. The announcement was made by the finance minister in her Budget 2020 speech. Earlier, the limit was set at Rs 1 lakh. The announcement comes in the wake of crisis at Mumbai-based urban cooperative bank, PMC Bank. Zee Business had urged the government to give better protection to customers after the PMC incident.

This scheme insures all types of bank deposits including savings, fixed and recurring with an insured bank. The insurance is provided by Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India. The insurance cover is provided only if the bank gets closed.

Meanwhile, the government proposed a Rs 22,000 crore outlay for renewables and power sector in 2020-21 for realising its goal of 24X7 electricity for all and providing freedom to consumers to choose service provider and tariff.

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"I propose to provide Rs 22,000 crore for power and renewable for 2020-21," said Sitharaman in her Budget speech in the Lok Sabha. She was of the view that taking electricity to all households was the major success of the government. She was referring to Saubhagya scheme under which 2.66 crore families were provided electricity connection. At present, except some households in difficult areas and Maoist-hit districts, power connection has been provided to all willing households.

The minister also proposed to provide Rs 4,400 crore for a programme to ensure cleaner air in cities with population of over one million by measures such as shutting down older thermal power plants.