New Delhi, Nov 29 (PTI) Over 12,000 depositors of Bengaluru-based Sri Guru Raghavendra Sahakara Bank Niyamitha (SGRSBN) -- which went bust two years back -- have received their deposit insurance cover of up to Rs 5 lakh.

BJP's Lok Sabha MP and the party's Yuva Morcha National President Tejasvi Surya said a total of Rs 401 crore has been disbursed directly into the bank accounts of 12,014 depositors.

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"Thousands of depositors of SGRSBN were in distress after the massive fraud came to the fore. The Centre made several changes to the laws to protect the interest of depositors. As a result today more than 12,000-odd depositors received their deposit insurance cover, amounting to Rs 401 crore," he told reporters.

This has given much needed relief to the depositors, he added.

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SGRSBN, located in Surya's Loka Sabha constituency Bengaluru South, received a total of Rs 753.61 crore as deposit insurance from the Deposit Insurance and Credit Guarantee Corporation (DICGC) towards 21,983 claims, he said.

The first lot of DICGC claims of 12,014 depositors amounting to Rs 401 crore was paid on Monday and the remaining claims will be paid soon, he added.

Further, Surya said the DICGC has paid the claims of up to Rs 5 lakh without deducting the Rs 1 lakh already paid by the bank and also up to Rs 5 lakh paid by the bank for treatment of critical illness.

There are 43,619 depositors in SGRSBN, on which the RBI had imposed regulatory restrictions on January 10, 2020 after a fraud of presenting fake profit and loss statements came to the fore.

Surya said there are 33,390 account holders with deposits of up to Rs 5 lakh in the cooperative bank and majority of them are senior citizens and from the middle-class.

Last year, the government brought cooperative banks under the purview of the RBI by amending the Banking Regulation Act. Earlier this year, the government raised the deposit insurance cover from Rs 1 lakh to Rs 5 lakh to be settled within 90 days of filing an application by amending the DICGC Act.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)