Functions of DICGC (Deposit Insurance Scheme)

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Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the Reserve Bank of India (RBI). It is established by ‘The Deposit Insurance and Credit Guarantee Corporation Act, 1961’ which came into force on January 1, 1962. It is a wholly-owned subsidiary of the RBI and providing deposit insurance is one of the functions of DICGC since 1962.

functions of DICGC

Functions of DICGC

One of the most important functions of DICGC is to provide insurance to the deposits in banks. About 92 per cent of deposit accounts of the entire banking system are fully protected under DICGC involving 28 per cent of the entire deposit amount of ₹120 lakh crore

Banks Insured by DICGC

Banks covered by Deposit Insurance Scheme are:

  • All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks
  • All eligible co-operative banks as defined in Section 2(gg) of the DICGC Act are covered by the Deposit Insurance Scheme. All State, Central and Primary co-operative banks functioning in the States/Union Territories which have amended their Co-operative Societies Act as required under the DICGC Act, 1961, empowering RBI to order the Registrar of Co-operative Societies of the respective States/Union Territories to wind up a co-operative bank or to supersede its committee of management and requiring the Registrar not to take any action for winding up, amalgamation or reconstruction of a co-operative bank without prior sanction in writing from the RBI, are treated as eligible banks. At present all Co-operative banks are covered by the Scheme
  • Primary cooperative societies are not insured by the DICGC

Types of Deposits Covered by DICGC

DICGC insures all bank deposits, such as saving, fixed, current, recurring, etc. except the following types of deposits:

  • Deposits of foreign Governments
  • Deposits of Central/State Governments
  • Inter-bank deposits
  • Deposits of the State Land Development Banks with the State co-operative bank
  • 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

Maximum Deposit Amount Insured by the DICGC

Each depositor in a bank is insured upto a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him in the same capacity and same right as on the date of liquidation/cancellation of bank’s licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force.

Management of DICGC

The authorized capital of the Corporation is 50 crore, which is fully issued and subscribed by the Reserve Bank of India (RBI). The management of the Corporation vests with its Board of Directors, of which a Deputy Governor of the RBI is the Chairman, Current chairman of DICGC is Shri N S Vishwanathan (Deputy Governor of RBI).

Head Office of DICGC

The Head Office of the DICGC is at Mumbai.

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