Deposit Insurance and Credit Guarantee Corporation (DICGC)

The government is considering increasing deposit insurance cover beyond the current ₹5 lakh, as per Financial Services Secretary.

• About DICGC: Deposit insurance is provided by the DICGC, a division of the Reserve Bank of India (RBI).
• Objective: To protect small depositors from losing their savings in case of a bank failure.
• Coverage: Provides ₹5 lakh per depositor, covering all accounts in all branches of an insured bank.

o Covers commercial banks, foreign bank branches in India, local area banks, regional rural banks, and cooperative banks.

• Excludes: Primary cooperative societies, deposits by foreign, central, and state governments, and inter-bank deposits.
• Types of deposits covered: Savings, fixed, current, and recurring deposits.
• Premium: Paid by the insured bank, collected by DICGC at a flat/differentiated rate based on risk.
• Legal Provision: Section 18A of the DICGC Act, 1961, allows depositors time-bound access to deposits when restrictions are imposed by RBI.