There is an enabling provision in Section 73 (2) (d) of the Companies Act whereby Companies permitted to accept deposits from the public will be required to “provide such deposit insurance in such manner and to such extent as may be prescribed”. Giving this information in written reply to a question in the Lok Sabha, Minister of Corporate Affairs, Shri Sachin Pilot, said that the operationalization of this provision would require framing of suitable rules in consultation with the Reserve Bank of India.

Deposit insurance requirement: companies taking public deposits must secure prescribed insurance, pending rules developed via consultation. Companies authorised to accept public deposits must provide deposit insurance in such manner and to such extent as may be prescribed; operationalising this obligation requires framing specific rules through consultative rulemaking with relevant banking and regulatory stakeholders to set the form, extent and mechanisms of the prescribed insurance.