Prime Minister Narendra Modi on Sunday said deposit insurance reforms undertaken by the government will instil confidence in account holders on the banking system.

Parliament in August passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021, ensuring that account holders get up to Rs 5 lakh within 90 days of the RBI imposing a moratorium on the banks.

This was done keeping the 'Depositors First' spirit in mind, Modi said while announcing that over 1 lakh depositors have got about Rs 1,300 crore of their money with stressed banks in the past few days with the enactment of the legislation.

He assured that about three lakh more such account holders will get their deposits with the banks that are under the RBI moratorium, soon.

At an event here at Vigyan Bhawan, the Prime Minister said banks play an important role in the progress of any nation.

"For the growth of banks, the safety of depositors' money is crucial...if we have to save banks, we have to provide security to depositors," he said.

Deposit insurance covers all deposits such as savings, fixed, current and recurring deposits in all commercial banks. Deposits in state, central and primary cooperative banks, functioning in states and Union Territories are also covered.

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