Deposit Insurance and Credit Guarantee Corporation (DICGC)

The Deposit Insurance and Credit Guarantee Corporation (DICGC) was established on January 1, 1962 in accordance with the provisions of The Deposit Insurance and Credit Guarantee Corporation Act, 1961. The DICGC is a wholly owned subsidiary of the Reserve Bank of India (RBI).

The authorised capital of the Corporation, entirely subscribed to by RBI, is ₹50 crore (₹500 million). The Head Office of DICGC is at Mumbai.

Main Functions

The two principal public policy objectives of the deposit insurance system are to protect depositors and contribute to financial stability. The main functions of DICGC are to formulate, implement and monitor the deposit insurance policy.

Deposit Insurance Coverage

• Insurance Limit: DICGC provides insurance coverage of up to ₹5 lakh per depositor per bank, including both principal and interest.
• Types of Deposits Covered The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits
  • Deposits of foreign Governments;
  • Deposits of Central/State Governments;
  • Inter-bank deposits;
  • Any amount due on account of any deposit received outside India
  • Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India
• Multiple Accounts in the Same Bank: If one person has different accounts in a bank like savings, fixed, recurring and current, it does not matter, his total insurance cover is max five lakhs rupees.
• Deposits in Different Banks: Deposits maintained with different insured banks are covered separately, up to ₹5 lakh per bank.
• Different Capacities: Deposits held in different rights and capacities, such as individual accounts and qualifying joint accounts, are separately insured according to DICGC rules.

Banks Covered Under DICGC

Commercial Banks

• All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.

Cooperative Banks

• All State, Central and Primary Cooperative Banks (Urban Cooperative Banks) functioning in States/Union Territories that have amended their Cooperative Societies Acts to empower RBI to:
  • order the Registrar of Cooperative Societies to wind up a cooperative bank or supersede its committee of management; and
  • require the Registrar to obtain prior written sanction from RBI before taking any action regarding the winding up, amalgamation or reconstruction of a cooperative bank, are covered under the Deposit Insurance Scheme.
• Present Position: All cooperative banks are presently covered by DICGC.
• Important: Primary Cooperative Societies are not insured by DICGC.

Compulsory Insurance

• Deposit insurance is compulsory for eligible insured banks.
• Banks cannot voluntarily withdraw from DICGC coverage

Deposit Insurance Premium

• The entire deposit insurance premium is paid by insured banks, not depositors.

Payment of Deposit Insurance Claims

DICGC becomes liable to pay eligible insurance claims under specified circumstances.

• If a bank goes into liquidation.
• If a bank is reconstructed or amalgamated / merged with another bank.
• If a bank is placed under directions by RBI and such directions prevent depositors from accessing their deposits in the bank

Cancellation of Deposit Insurance Registration

DICGC can cancel the registration of an insured bank under specified circumstances.

These include:

• Failure to pay insurance premiums for three consecutive periods.
• Cancellation or refusal of the bank’s licence by RBI.
• Prohibition on accepting fresh deposits.
• Voluntary or compulsory winding up of the bank.
• The bank no longer qualifies as a banking company or cooperative bank under the Banking Regulation Act, 1949.
• Transfer of all deposit liabilities to another institution.
• Certain cases of amalgamation or reconstruction.