Deposit Guarantee Scheme for PACBs

The PACBs in Tamil Nadu have mobilised deposits from their members and from the public to the extend of Rs.2460.46 crores as on 31.3.2007. With a view a create a sense of security in the minds of depositors and for giving impetus for deposit mobilisation by PACBs, a Deposit Guarantee Scheme has been introduced in the State since 1992-1993. The amount contributed by the Bank to the Deposit Guarantee Scheme upto 31.3.2007 was Rs.3.34 crores. The following are the salient features of the Deposit Guarantee Scheme implemented in the State:

a) Amount guaranteed Actual amount of deposit held by depositors or Rs.30,000, whichever is lower.
b) Type of Deposit All types.
c) Duration of deposit No restrictions.
d) Guarantee Fee 0.30% of the deposit guaranteed.
e) Sharing of Guarantee PACBs : 0.15%
DCCBs : 0.10%
TNSCB : 0.05%
f) Manner of investment of the corpus The Guarantee fee received will be kept in Deposit Guarantee Corpus with DCCB of the District as Special Deposit.
g) Rate of interest to be paid by DCCB on the deposits in the Fund Highest rate of interest as applicable on deposits from depositors.
h) Time limit for remittance of Guarantee Fee 1 month from the date of closure of the accounting year for PACBs.
i) Administration of the Fund A Committee comprising of the representatives, one each from the DCCB, SCB, RCS and representatives from 2 PACBs which have made a maximum contribution to the Fund.

 The purpose of creation of the Fund is to enable settlement of claims to depositors to the extent of the amount guaranteed as per the scheme if the PACBs do not repay the deposits on account of liquidation.