
Deposit Insurance and Credit Guarantee Corporation
Deposit Insurance and Credit Guarantee Corporation (DICGC) was launched on 15th July 1978. DICGC is one of the subsidiaries of the Reserve Bank of India. This corporation was derived by combining two corporations namely, Deposit Insurance Corporation (DIC) and Credit Guarantee Corporation of India Limited (CGCI). DICGC aims to provide insurance for deposits and to guarantee credit facilities to the customers of banks. The role of DICGC helps establish trust in the banking function amongst customers and depositors in India.Objective of DICGC
DICGC operates to benefit the small depositors by securing the public confidence relating to the banking system by provision of deposit insurance. Hence, in case of failure of a bank, DICGC undertakes to compensate small depositors by repaying them the amount deposited in any bank. All commercial banks including foreign, local, co-operative banks and regional banks are covered by theDeposit Insurance and Credit Guarantee Corporation (DICGC).Features of DICGC Guarantee
- Every depositor is provided with Rs.1 lakh guarantee for both the principal and interest amount.
- If the customer has accounts in various banks, all the accounts will be insured for Rs. 1 lakh each.
- If the customer has access to more than one account in a bank, all the accounts will be considered as one account.
- The depositors or customers can avail the benefits of the deposit insurance for free of cost.
- On the other hand, the deposit insurance premium is paid by the insured banks to the DICGC.
- DICGC is endowed to cancel the registration of an insured bank if the bank does not pay the premium for three continuous half-year periods.
- DICGC can also restore the registration of a bank if the bank makes requests for restoration after payment of all overdue premiums.
Types of Deposits Covered
All bank deposits are insured by DICGC. They are saving deposits, current deposits, recurring deposits, etc. The following deposits are not covered by this scheme.- Deposits made by the foreign Governments
- Deposits made by the Central/State Governments
- Inter-bank deposits
- Deposits made by the State Land Development Banks with the State co-operative banks
- Any amount due and deposit received outside India
- The amount that is spared by the corporation with the previous approval of the RBI
Maintenance of Premium
It is mandatory for an insured bank to pay the premium within the last day of May and November every year. If the payment is not made within the allocated time period, an interest of 8% must be paid along with the overdue premium. The interest is calculated for the number of default days taking into account 1 year as 365 days. The premium amount can be paid in the following manner.- It can be directly credited to the Deposit Insurance Fund account that is maintained under RBI, Deposit Accounts Department, Mumbai.
- It can be paid by crossed cheque, demand draft or T.T. drawn and should be paid in Mumbai.
Maintenance of Funds
The funds that are maintained by the Corporation are as follows.- Deposit Insurance Fund
- Credit Guarantee Fund
- General Fund
Related Guides
Popular Post

Starting a small business can be a transformative venture, offering the exciting opportunity...

Tax deduction at source, shortly and popularly known as TDS, was introduced by the Income Tax...

Goods & Services Tax Certificate is issued to people who are registered under GST...

GST registration applies to all individuals and entities supplying goods or services in India. GST...

Gift tax in India is applied when the value of the received gift exceeds ₹50,000 in the...

The Union Budget 2025 has brought significant changes to India’s personal income tax structure, raising the...

The Goods and Services Tax (GST) is an indirect tax system introduced in India in 2017. It functions...

A trademark search is simply checking if another person or organization does not already own the...

Section 194H of the Income Tax Act in India mandates the deduction of Tax at Source (TDS) on commission or brokerage...

Section 80G Deduction is a facility available in the Income Tax Act which allows taxpayers to...

The Income Tax Department (ITD) has not provided specific guidance on crypto taxes for Indian investors. However...

Internal audit applicability is a critical concept for companies in India, impacting various...

In the business world, two main types of companies exist: private company and public company...

Ministry of Finance vide a Notification No 05/2022- Central Tax (Rate) dated 13.7.2022 has issued...

The Central Board of Indirect Taxes and Customs (CBIC) has recently announced an extension...

Depreciation is a key concept in finance and accounting. It helps us manage how the value of...

Form 10IA of the Income Tax Department must be filed by taxpayers claiming income tax deduction...

The Goods and Services Tax (GST) system in India has been a significant reform in the country's...

India's Gross Domestic Product (GDP) benefits significantly from the substantial...

The Finance Act, 2023 introduced the MSME 45-day payment rule under Section 43B(h) of the Income Tax Act...

The Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2024, was announced by Union Finance Minister...