DICGC insures up to a maximum of Rs 1 Lakh
The Deposit Insurance and credit guarantee corporation (DICGC) is a subsidiary of the Reserve Bank of India which insures all bank deposits that are payable in India such as savings, current, recurring, fixed, etc. Each depositor in a bank is provided an insured amount of maximum Rupees One Lakh on both the interest amount and the principal amount taken together, held by the depositor in the same right and same capacity as on the date of liquidation/in case of cancellation of the depositor’s bank license.
If the depositor is having deposits in multiple bank account with different branches of the same bank, then the deposits are aggregated for insurance and a maximum of Rupees one lakh is paid regardless of the amount in their accounts.
DICGC was established under the Deposit Insurance and Credit Guarantee Corporation Act, 1961 on 15 July 1978.
Why in News?
An Right to Information (RTI) was filed by Press Trust of India (PTI) in which DICGC has mentioned that: Under the provision of Section 16(1) of DICGC Act of 1961, if a bank gets liquidated, in that case DICGC is liable to pay each depositor the amount of his deposit up to Rupees one lakh as insurance cover through the liquidator for both the principal and interest amount held by the depositor in the same capacity and same right at all the branches of a bank taken together.