Centre is Planning to Raise the Deposit Insurance Limit

Learn about the Deposit Insurance and Credit Guarantee Corporation (DICGC), its role in protecting bank deposits in India, coverage limits, and how it ensures financial security for depositors.

Context: The Indian government is considering increasing the bank deposit insurance cover beyond the current ₹5 lakh per depositor.

About Deposit Insurance and Credit Guarantee Corporation (DICGC)

Deposit Insurance

Deposit insurance is a financial safety net that protects depositors from bank failures by guaranteeing a certain amount of their money.
In India, deposit insurance is managed by DICGC.

DICGC is a wholly-owned subsidiary of the Reserve Bank of India (RBI).
It provides insurance cover to bank depositors to ensure protection in case of bank failures.
It was established in 1978 under the Deposit Insurance and Credit Guarantee Corporation Act, 1961.

Main Function of DICGC: Deposit Insurance

Provides insurance coverage to depositors in case a bank fails.
Currently insures deposits up to ₹5 lakh per depositor per bank (principal + interest).

Banks Covered Under DICGC

Commercial Banks (Public, Private, Foreign Banks)
Regional Rural Banks (RRBs)
Local Area Banks
Urban Cooperative Banks (UCBs)
State & Central Cooperative Banks
Exclusions: Primary Cooperative Societies.

Deposit Insurance Coverage

Maximum Cover: ₹5 lakh per depositor per bank (since February 4, 2020).
Covers: Savings, Fixed, Current and Recurring Deposits.
- Exclusions: Deposits in foreign branches of Indian banks, Government deposits and interbank deposits.
In case of bank failure: Depositors receive claims through DICGC within 90 days.