Prime Minister Narendra Modi on Sunday said the move to increase bank deposit insurance cover to Rs five lakh would fully insure 76 lakh crore of saving of poor and middle class.

Addressing a function on ”Depositors First: Guaranteed Time-bound Deposit Insurance Payment up to Rs 5 lakhs” here, the Prime Minister said the spirit of the ‘Depositors First’ programme was very meaningful and was taken after understanding the concerns of the poor and middle class.

Modi said earlier only one lakh was insured but in the new system the victim would get an insured amount of Rs five lakh within the mandatory 90 days time frame. He said it was very important to protect the money of the depositors in the banks.

In the banking sector, the problem was not only about the bank account, but also about the delivery of banking services to the remotest villages. ”Today, in almost every village of the country, the facility of a bank branch or a banking correspondent has reached within a radius of 5 km,” he added.

The measures taken in the last few years have taken the facilities like insurance, bank loans and financial empowerment to a large underserved segment of the poor, women, street vendors and small farmers, the PM said. It was a priority of the government to economically empower women, he said.

The Prime Minister said banking had not reached women of the country in any significant way earlier. He said this was taken as a priority by his government. Of the crores of bank accounts opened under Jan Dhan Yojana, more than half belong to women. “The effect these bank accounts have on the economic empowerment of women, we have also seen in the recent National Family Health Survey”, he said.

”The Deposit insurance covers all deposits including savings, fixed, current, and recurring deposits in all commercial banks, functioning in India. Deposits in State, Central and Primary cooperative banks, functioning in States/Union Territories are also covered,” the PM said.

With deposit insurance coverage of Rs 5 lakh per depositor per bank, the number of fully protected accounts at end of previous financial year constituted 98.1 per cent of the total number of accounts, as against the international benchmark of 80 per cent.

The first tranche of interim payments has been released by the Deposit Insurance and Credit Guarantee Corporation recently, against claims received from depositors of 16 Urban Cooperative Banks which are under restrictions by RBI. Payout of over Rs 1300 crore has been made to alternate bank accounts of over 1 lakh depositors against their claims, Modi said.