NEWS

Prime Minister paid deposit insurance to  depositors who could not access their money as their banks faced financial crises

DEPOSIT INSURANCE

• Providing insurance protection to the depositor’s money by receiving a premium.
• By Deposit Insurance and Credit Guarantee Corporation (DICGC) under RBI
• To protect depositors if a bank fails.
• DICGC charges 10 paise per ₹100 of deposits held by a bank.
• The premium paid by the insured banks to the Corporation is paid by the banks and is not to be passed on to depositors.
• DICGC last revised the deposit insurance cover to ₹5 lakh in Feb, 2020, raising it from ₹ 1 lakh since 1993.
• It will be provided within 90 days in the event of a bank coming under the moratorium imposed by the RBI.
• Coverage: All deposits such as savings, fixed, current, recurring deposits, etc. in all commercial banks, functioning in India. Deposits in State, Central and Primary cooperative banks, functioning in States/Union Territories are also covered.
• Does not include
  • Deposits of foreign governments.
  • Deposits of central/state governments.
  • Inter-bank deposits.
  • Deposits of the state land development banks with the state co-operative bank.
  • Any amount due on account of any deposit received outside India.
  • Any amount specifically exempted by the DICGC with previous approval of RBI.