Deposit Insurance and the DICGC
How the DICGC insures bank deposits up to a fixed amount per depositor per bank, which deposits are covered and which are excluded, how the limit applies across joint accounts and different capacities, and when the DICGC pays — with a worked calculation of a depositor's insured amount.
What you will be able to do
- State what the DICGC is, who owns it, and that cover is automatic and bank-funded.
- List the deposits that are covered and the categories that are excluded.
- Apply the per-depositor-per-bank limit across branches, banks and different account capacities.
- Describe when the DICGC becomes liable and the 90-day payout rule.
What is inside this lesson
- 1What deposit insurance is
- 2What is covered and what is not
- 3The per-depositor-per-bank limit
- 4Same capacity and same right
- 5When the DICGC pays
- 6Working out a depositor's insured amount
- 7Common confusions
- 8Quick revision
- 9Practice
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What deposit insurance is
If a bank fails, small depositors could lose their savings. Deposit insurance guarantees each depositor a fixed amount even if the bank cannot pay. In India it is run by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the RBI, set up under the DICGC Act, 1961.
Cover is automatic — a depositor does not apply for it or pay for it. Every commercial bank, regional rural bank, local area bank, payments bank and small finance bank operating in India, and eligible cooperative banks, are registered with the DICGC.
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