DICGC Full Form

DICGC Full Form

1) DICGC full Form is Deposit Insurance Credit Guarantee Corporation.

2) DICGC established in the year 1978 July 15 under DICGC act 1961.

3) DICGC is a wholly owned subsidiary of Reserve Bank of India.

4) Main aim of DICGC is to provide financial stability to the banking system by deposit insurance, special for the benefit of small depositors. 

5) DICGC head quarter is Mumbai.

6) Mission of DICGC is

DICGC mainly contribute to financial stability by securing public confidence within the banking industry by provision of deposit insurance, particularly for the advantage of the tiny depositors..

7) Vision of DICGC is

DICGC is recognised as one of the best efficient and effective deposit insurance providers, responsive to the needs of its stakeholders.

8) DICGC history

The idea of the formation of Deposit Insurance came for the primary time in 1948 after the Banking crisis in Bengal. it had been again came up for reconsideration in 1949 but was placed on hold by RBI, because it was making required arrangements for the inspection of all the banks of that point . In 1950, this idea was supported by the agricultural Banking Enquiry Committee. However, after the crash of Palai financial institution Ltd and therefore the Laxmi Bank Ltd in 1969, serious thought on this concept was given by the Central Government and therefore the Federal Reserve Bank of India. On August 21, 1961, a bill was introduced within the parliament called as Deposit Insurance Corporation Bill (DIC). Its  got the approval of the President on 07th December 1961.

The Deposit Insurance Act established in the year 1961. DICGC came into force on January 01, 1962. It initially functioned just for the commercial banks (SBI and its subsidiaries, other commercial banks and therefore the branched of the foreign banks operating in India). In 1968, after the adoption of the Deposit Insurance (Amendment) Act, In the year 1968 co-operative banks also got insured by Deposit Insurance Corporation (DIC) under the provisions of Section 13 of the Act.

On January 14, 1971, the Federal Reserve Bank of India promoted a public Ltd. called as Credit Guarantee Corporation of India Ltd.(CGCI). it had been aimed to encourage the commercial banks to satisfy the credit needs of the neglected sectors by providing guarantee cover to the loans and advances granted by credit institutions.

15 July 1978, these two organizations (DIC and CGCI) were merged and was named as Deposit Insurance and Credit Guarantee Corporation (DICGC).

This act is named as Deposit Insurance Act was also renamed as Deposit Insurance and Credit Guarantee Corporation Act, 1961.

9) Maximum amount insured by DICGC is

Deposits are insured up to Rs. 5,00,000 (5 lakh) under the  (DICGC), customers do not have to pay any premium for it. DICGC charges nominal premium to the Bank.

10) DICGC official website is  www.dicgc.org.in
official email id for queries at dicgc@rbi.org.in

11) These deposit are not insured by DICGC:

A)  Governments deposits.

B) Central or State Government deposits.

C) Inter Bank Deposits.

D) State Co-operative Bank Deposit.

12) DICGC insures

A) Savings Accounts Deposit
B) Current Accounts Deposit
C) Recurring Accounts Deposit
4) Fixed Deposits.

DICGC - Frequently Asked Questions

a) How customers get to know bank is insured with DICGC or not.

The DICGC after registering the banks as insured banks giving them with printed leaflets for display information relating to the protection afforded by the Corporation to the depositors of the insured banks. In case of doubt, customers should make specific enquiry from the branch official in this regard.

b) Ceiling limit for a customer who having deposits in same bank different branches.

Customers deposit kept in different branches of a same bank are aggregated for the purpose of insurance cover and a maximum amount of upto Rupees five lakhs only.

c) DICGC covers principal and accrued interest?

Yes it's covers principal and accrued interest upto five lakhs only.

For example-

Mr A having fixed deposit of RS 480000. After one year he earns interest of RS 30000. Bank need to pay maturity value 510000. But in DICGC it will cover insurance upto 5 lakh only. Interest would not be insured, not because it was interest but because that was the amount over the insurance limit of RS 500000.

d) Customer deposits in different banks separately insured?

Yes. Customer deposits in different bank is separately insured. If customer have deposits with more than one bank, deposit insurance coverage limit is applied separately to each bank deposits upto five lakhs.

e) Can the bank deduct the amount of dues payable by the depositor?

Yes. Banks can deduct the amount of dues payable by the depositor. They have the right to set off their dues from the amount of deposits as on cut off date. The deposit insurance is out there after netting of such dues.

f) Who pays the premium of deposits insurance?

Deposit insurance premium is paid entirely by the insured bank.

g) When is DICGC liable to pay the amount of insurance

If a bank goes into liquidation, DICGC is susceptible to pay to the liquidator the claim amount of every depositor upto Rupees five lakhs within two months from the date of receipt of claim list from the liquidator.

h) In case of Joint Accounts

In case of a person holding 2 accounts in a bank, one individually and the other as a joint account, then DICGC shall be paying the compensation of Rs 500000 to each depositor.

I) DICGC is mandatory for Banks

Yes. DiCGC is mandatory for Banks. Therefore no Bank can withdraw from it.

j) Is YES Bank covered under DICGC

Yes it's covered under DICGC.

Customers deposits in the YES BANK are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme for maximum amount of up to INR 5 lakhs per customer, subject to applicable regulatory guidelines as amended from time to time.

h) DICGC Premium

The rate of premium need to pay by insured banks will be 12 paise per Rs 100 of assessable deposits per annum.

Deposit Insurance:

Insurance of bank deposits is meant to guard the interest of depositors, on account of failure of banks. After the banking crises in Bengal within the year 1948 the concept of insuring deposits kept with banks received attention for the primary time. The question came up for reconsideration within the year 1949, but it had been decided to carry it abeyant till the Federal Reserve Bank of India ensured adequate arrangements for inspection of banks.
After the crash of the Palai financial institution Ltd., and therefore the Laxmi Bank Ltd. in 1960,serious thought to the concept was, given by the Federal Reserve Bank of India and therefore the Central Government. The Deposit Insurance Corporation (DIC) Bill was introduced within the Parliament on August 21, 1961. After it had been gone by the Parliament, the Bill got the assent of the President on December 7, 1961 and therefore the Deposit Insurance Act, 1961 came into force on January 1, 1962.
The scheme is now being administered by Deposit Insurance and Credit Guarantee Corporation of India Ltd. (DI & CGC).

The scheme of deposit insurance infuses protection and confidence within the depositors.

Deposit Insurance and Credit Gurantee Corporation (DI & CGS):

The Government of India introduced the scheme on 1st April 1981 in lieu of the sooner Credit Guarantee Scheme, which came into force on January 1, 1962

The scheme provides a measure of protection to eligible credit institutions against possible losses in respect of their advances to small scale industries and loans to other small borrowers like artisans, self employed persons, satisfying RBI criterion. It also provides insurance to banks protectively to small depositors. The eligible credit institutions include — Commercial Banks, Regional Rural Banks, Co-operative Banks, State Financial Corporations and certain State Industrial Development Corporations, etc.

The DICGC insures all deposits like savings, fixed, current, recurring, etc deposits except the subsequent sorts of deposits.
(i) Deposits of foreign Governments;(ii) Deposits of Central/State Governments;(iii) Inter-bank deposits;(iv) Deposits of the State exploitation Banks with the State co-operative bank;(v) Any amount due on account of and deposit received outside India(vi) Any amount, which has been specifically exempted by the corporation with the previous approval of Federal Reserve Bank of India
Each depositor during a bank is insured up to a maximum of Rs.1, 00,000 (Rupees One Lakh) for both principal and interest amount held by him within the same right and same capacity as on the date of liquidation/cancellation of bank's Licence or the date on which the scheme of amalgamation/merger/reconstruction/reconstruction comes into force
The DICGC is susceptible to pay to every depositor through the liquidator, the quantity of his deposit up to Rupees one lakh within two months from the date of receipt of claim list from the liquidator.
If a bank is reconstructed or amalgamated / merged with another bank, the DICGC pays the bank concerned, the difference between the complete amount of deposit or the limit of insurance cover effective at the time, whichever is a smaller amount and therefore the amount received by him under the reconstruction / amalgamation scheme within two months from the date of receipt of claim list from the transferee bank / Chief military officer of the insured bank/transferee bank because the case could also be .

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