Dear Readers In this article we are here with Banking Awareness Study Notes As A Guide to the deposit insurance and credit guarantee corporation (DICGC). This is an important Corporation related to Indian Banking System. All Bank Exam Preparation Candidate require some basic knowledge about it.
About Deposit Insurance in India
The idea behind the Deposit Insurance is to boost the faith of the public in the Indian banking system, and provide protection against the loss of deposits to a significant extent In India, the bank deposits are covered under the insurance scheme provided by Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the Reserve Bank of India (RBI). DICGC is a statutory body, created by an act of parliament in 1961.
The DICGC insures all deposits (such as savings, fixed, current, and recurring deposits) with eligible banks except the following:
- Deposits of foreign Governments.
- Deposits of Central/State Governments.
- Inter-bank deposits.
- Deposits of the State Land Development Banks with the State cooperative 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.
- Deposit Insurance and Credit Guarantee Corporation ( DICGC) is a subsidiary of Reserve Bank of India(RBI) established on July 15, 1979 under Deposit Insurance and Credit Guarantee Corporation Act, 1961 for the purpose of providing insurance of deposits and guaranteeing of credit facilities
- Objective – to provide for the benefit of depositors in bank, insurance against the loss of all of their deposits in all branches of a bank to a maximum of Rs. 100,000
- Head Office – Mumbai
- It has four branches in Delhi, Chennai, Kolkata and Nagpur
- The management of the Corporation consists of a Board of Directors, of which a Deputy Governor of the RBI is the Chairman. The Board consist of the following members besides the Chairman
- one Officer (normally in the rank of Executive Director) of the RBI
- one Officer from the Central Government
- Five Directors nominated by the Central Government in consultation with the RBI:-
(a) three of whom are persons having special knowledge of commercial banking, insurance, commerce, industry or finance
(b) two of whom shall be persons having special knowledge of, or experience in co-operative banking or co-operative movement
- Four Directors, nominated by the Central Government in consultation with the RBI, having special knowledge or practical experience in respect of accountancy, agriculture and rural economy, banking, co-operation, economics, finance, law or small scale industry or any other matter which may be considered to be useful to the Corporation.
- The Corporation maintains the following 2 separate funds which are funded by the premium and guarantee fees received
- Deposit Insurance Fund
- Credit Guarantee Fund
- One more fund called General Fund is maintained which holds the capital of the Corporation, the staff establishment and administrative expenses.
- The following are the types of deposits covered DICGC insures all bank deposits
- The following are the deposits which are not covered by DICGC
- Deposits of foreign Governments
- Deposits of Central/State Governments
- Inter-bank deposits
- Deposits of the State Land Development Banks with the State co-operative banks
- Any amount due on account of and deposit received outside India
- Any amount which has been specifically exempted by the corporation with the previous approval of the RBI.
Every eligible bank depositor is insured up to a maximum of `1,00,000 (Rupees One Lakh) for both principal and interest amount held by him.
Must check FREQUENTLY ASKED QUESTIONS for Deposit Insurance and Credit Guarantee Corporation of India (DICGC) Provided by Reserve Bank of India (RBI).Must Check Banking Awareness Free Study Notes, PDF and Capsule here