1. Deposit Insurance and Credit Guarantee Corporation (DICGC) has been started in 1961 under DICGC Act 1961 with the mission of making financial stability by securing public confidence in the banking system through the provision of deposit insurance. DICGC is a fully owned subsidiary of Reserve Bank of India, it has invested Rs.50.00 Crore as share capital.
2. DICGC was established for providing insurance of deposits and guarantee of credit facilities. At present, DICGC insures each depositor of a registered insured bank up-to a maximum of Rs.1.00 Lakh for all bank deposits, such as savings, fixed, current, fixed deposits.
3. The credit guarantee scheme of DICGC is presently not operative as the banks have opted out of the scheme due to availability of alternate guarantee schemes viz. CGTMSE, CGSEL, NCGTC, MUDRA.
4. All registered insured banks are liable to pay to the DICGC deposit insurance premium at the rate of 10 paise per annum for every deposit of Rs.100.00 for the half year ending March and September on the total deposits of the bank as on the preceding half year.
5. Deposit insurance is compulsory for all banks in the country. Therefore all public sector banks, local area banks, regional rural banks, small finance banks, payments banks, branches of foreign banks functioning in India, all state, central, primary co-op banks. There are 2100 plus banks are registered under this scheme.
6. The deposits kept in different branches of a bank are aggregated for the purpose of insurance cover and a maximum amount up-to Rupees one lakh is paid. However, Deposits of different banks are insured separately. The insurance cover of Rs.1.00 Lakh per depositor in the same right same capacity is for each bank separately. Therefore if two banks are closed at the same time, the same depositor will be eligible for a maximum insurance cover of Rs.1.00 Lakh each in each bank.
7. Deposits are considered as ‘Same Capacity and in the Same right’. Therefore, the balances are aggregated and set off against the amount due to the bank then the net amount is arrived which is payable to the depositor maximum of Rs.1.00 Lakh.
8. If the deposits in the name of a proprietary concern and the sole proprietor of the concern will be considered as ‘Same Capacity and in the Same right’. However, if the deposits are in the name of the partner of the firm, guardian of a minor, director of a company, trustee of a trust, a joint account with another person will be considered as different capacity and different right.