DICGC Full Form-Deposit Insurance and Credit Guarantee Corporation

DICGC - deposit insurance and credit guarantee corporation protects your bank deposits in india

When it comes to saving money, most people in india rely on banks. Whether it’s a savings account, fixed deposit, or recurring deposit, we trust banks to keep our money safe. But what happens if a bank fails or goes bankrupt? That’s where dicgc - deposit insurance and credit guarantee corporation comes in.

what is dicgc?

The full form of dicgc is deposit insurance and credit guarantee corporation. It is a wholly owned subsidiary of the reserve bank of india (rbi). The dicgc was established under the deposit insurance and credit guarantee corporation act, 1961. Its primary role is to provide insurance cover for bank deposits in india, ensuring the safety of depositors' money.

purpose of dicgc

The main purpose of dicgc - deposit insurance and credit guarantee corporation is to protect small depositors by providing insurance against the loss of bank deposits in case of bank failure. This helps maintain public confidence in the banking system and prevents panic during financial crises. how dicgc works

Every bank in india, including commercial banks, regional rural banks, local area banks, and cooperative banks, has to pay a premium to dicgc. In return, dicgc provides insurance coverage to all eligible bank deposits held by customers.

If a bank is unable to return deposits due to financial instability or liquidation, dicgc steps in and repays the insured amount to depositors.

deposit coverage by dicgc

As of the latest update, dicgc insures each depositor up to ₹5 lakh (five lakhs) per bank. This amount includes both principal and interest held by the depositor across different types of accounts in the same bank.

Here are some key points to note:

• The ₹5 lakh limit is per bank, not per account.

• If you have accounts in multiple banks, each bank is separately insured.

• Coverage includes savings accounts, fixed deposits, current accounts, and recurring deposits.

types of banks covered under dicgc

dicgc provides insurance to the following types of banks in india:

• commercial banks (public and private sector)

• foreign banks operating in india

• regional rural banks

• cooperative banks (state and district level)

• local area banks

However, non-banking financial companies (nbfcs) are not covered under dicgc insurance.

what deposits are not covered under dicgc?

Though dicgc covers most types of deposits, there are certain exclusions:

• deposits of foreign governments

• deposits of central/state governments

• inter-bank deposits

• deposits outside india

• cooperative societies holding deposits in cooperative banks

• any amount due on account of a deposit where the bank has not paid the insurance premium to dicgc

claim process under dicgc

If a bank is placed under moratorium or liquidation, the dicgc coordinates with the rbi-appointed liquidator to settle claims. Here's how it works:

1. The liquidator collects information about the depositors and verifies account balances.

2. Within 90 days, dicgc processes the claim and reimburses insured deposits up to ₹5 lakh.

3. The amount is directly credited to the depositor’s alternate bank account or paid via other approved channels.

recent developments and reforms

In recent years, the indian government and rbi have taken steps to strengthen the dicgc mechanism. A key reform was the increase in insurance coverage from ₹1 lakh to ₹5 lakh in 2020, after a gap of almost 27 years. Additionally, a time-bound resolution for releasing insured amounts has been introduced to reduce delays and ensure prompt payouts.

importance of dicgc for depositors

dicgc - deposit insurance and credit guarantee corporation plays a crucial role in india’s financial ecosystem. Its importance lies in the following aspects:

• builds depositor confidence: People feel safe keeping money in banks, knowing their deposits are insured.

• protects small savers: A majority of depositors in india fall within the ₹5 lakh limit, ensuring maximum coverage.

• supports financial stability: dicgc helps prevent panic withdrawals during times of banking uncertainty.

tips to maximize dicgc insurance benefit

Here are some smart tips to make the most of dicgc insurance:

• Distribute large deposits across different banks to ensure full insurance coverage for all your savings.

• Maintain updated nominee details and KYC to avoid delays in claim settlement.

• Stay informed about your bank’s financial health by checking rbi notices and updates.

The deposit insurance and credit guarantee corporation (dicgc) serves as a silent guardian of your hard-earned savings. Though we often don’t think about it, dicgc acts as a safety net in times of banking crisis. With coverage up to ₹5 lakh per depositor per bank, dicgc ensures that even if a bank fails, your money doesn’t vanish.

Understanding how dicgc works can help you make safer financial decisions and plan your savings more effectively. In a world of growing financial complexity, the dicgc continues to be a trusted protector for millions of indian depositors.