DEPOSIT INSURANCE & CREDIT GUARANTEE CORPORATION (DICGC)
Essential for All Upcoming Bank Exams
Deposit Insurance and Credit Guarantee Corporation (DICGC) is a wholly owned subsidiary of RBI and DICGC Act 1961 provides insurance cover on the deposits of banks.
The deposit insurance is compulsory for all banks in India. All commercial banks (except urban coop form Arunachal Pradesh, Mizoram, Meghalaya, Nagaland and the Union Territories Chandigarh, Dadra & Nagar Haveli and Lakshadweep) are covered by the DICGC. Primary co-operative societies are not insured by the DICGC.
Types of Insured Deposit:
All deposit such as fixed, savings, current, recurring etc. (except deposits of foreign Government, Central or State Governments, inter-bank deposits, deposits of the State Land Development Banks with the State co-operative bank, any amount due on account of and deposit received outside India, any amount, which has been specifically exempted by the corporation with the previous approved of RBI).
Cancellation of insurance cover:
If it fails to pay the premium for three consecutive periods or the bank is prohibited from receiving fresh deposits, DICGC may cancel the registration of an insured bank or its licence is cancelled or a licenced is refused to it by the RBI or it is wound up either voluntarily or compulsorily.
Deposit kept with different branches:
For the purpose of insurance cover the deposit kept in different branches of a bank are aggregated and a maximum amount up to Rs. 1lakh is paid.
Extent of Insured Deposit:
- For both principal and interest amount held by him in the same right and same capacity as on the date of liquidation or cancellation of banks’ licence or the date on which the scheme of merger or reconstruction comes into force,
- Each depositor in a bank is insured up to a maximum of Rs. 1lakh.
If a bank goes into liquidation:
The DICGC pays to each depositor through the liquidation, the amount of his deposit up to Rs. 1lakh from the date of receipt of claim list within two months.
Deposits with more than one bank:
Where a depositor has deposits with more than one bank, deposit insurance coverage limit is applied severally to the deposits in each bank.
If a bank is reconstructed or merged with another bank:
The DICGC pays the concerned –
- The difference between the full amount of deposit and the limit of insurance cover in force at the time.
- Under the reconstruction scheme whichever is less and the amount received by him within two months from the date of receipt of claim list from the transferee bank or Insured Bank or Transferee Bank as the case may be.