“If my bank fails, how much of my money is safe?” The answer comes from the Deposit Insurance and Credit Guarantee Corporation (DICGC). It is a frequent question in IBPS, SBI and RBI exams and very useful for everyday life too.
DICGC at a glance
| Fact | Detail |
|---|---|
| Full form | Deposit Insurance and Credit Guarantee Corporation |
| Law | DICGC Act, 1961 |
| Origin | Deposit Insurance Corporation (DIC) began on 1 January 1962 |
| Merger | DIC merged with the Credit Guarantee Corporation of India to form DICGC on 15 July 1978 |
| Owner | Wholly owned subsidiary of RBI |
| Headquarters | Mumbai |
| Chairperson | A Deputy Governor of RBI |
| Insurance cover | ₹5 lakh per depositor per bank (since 4 February 2020) |
| Premium paid by | Banks (not depositors) |
India was among the first countries to start deposit insurance, after the USA (FDIC, 1933). The failures of Palai Central Bank and Laxmi Bank in 1960 pushed India to bring the law.
How the ₹5 lakh cover works
- The cover is ₹5 lakh per depositor, per bank, for principal plus interest together.
- All your accounts (savings, current, FD, RD) in all branches of the same bank are added together.
- Deposits held in different capacities or rights are covered separately. Example: an individual account and a joint account with someone else, or an account as a partner of a firm.
- Deposits in different banks are insured separately (₹5 lakh in each bank).
| Example | Insured amount |
|---|---|
| Savings ₹2 lakh + FD ₹4 lakh in Bank A | ₹5 lakh (₹1 lakh is uninsured) |
| ₹4 lakh in Bank A + ₹4 lakh in Bank B | ₹8 lakh (fully covered) |
| Own account ₹5 lakh + joint account (with spouse) ₹5 lakh in Bank A | ₹10 lakh (different capacity) |
History of the cover limit
| From | Cover per depositor |
|---|---|
| 1962 | ₹1,500 |
| 1968 | ₹5,000 |
| 1970 | ₹10,000 |
| 1976 | ₹20,000 |
| 1980 | ₹30,000 |
| 1 May 1993 | ₹1 lakh |
| 4 February 2020 | ₹5 lakh |
Proposals to raise the cover above ₹5 lakh have been reported, but no change had been notified at the time of writing. Check the latest DICGC notice.
Which banks are covered?
| Covered | Not covered |
|---|---|
| All commercial banks, including branches of foreign banks in India | Primary Agricultural Credit Societies (PACS) |
| Local Area Banks and Regional Rural Banks | NBFCs and their deposits |
| Small Finance Banks and Payments Banks | Chit funds, post office schemes (backed by the government anyway) |
| State, central (district) and urban co-operative banks |
Which deposits are NOT covered?
- Deposits of foreign governments
- Deposits of the Central and State Governments
- Inter-bank deposits
- Deposits of State Land Development Banks with the State Co-operative Bank
- Deposits received outside India
- Any amount specially exempted with RBI’s approval
Premium
- Banks pay a premium of 12 paise per ₹100 of assessable deposits per year (raised from 10 paise in 2020).
- The premium cannot be passed on to depositors.
- RBI has worked on a risk-based premium system so that safer banks pay less (approx; as reported).
DICGC (Amendment) Act, 2021: the 90-day rule
When RBI places a bank under restrictions (moratorium), depositors no longer have to wait for liquidation:
| Day | Step |
|---|---|
| Within 45 days | Bank collects depositor claims and sends them to DICGC |
| Next 45 days | DICGC verifies and pays |
| Total: 90 days | Depositors get up to ₹5 lakh |
Thousands of depositors of PMC Bank and other troubled co-operative banks were paid under this rule.
Coverage in numbers (approx)
| Metric | Approx figure |
|---|---|
| Accounts fully protected | About 97–98% of all accounts |
| Value of deposits insured | About 40–45% of assessable deposits |
| Insured banks | About 1,950–2,000 |
Exam-ready one-liners
- DICGC is a wholly owned subsidiary of RBI, headquartered in Mumbai.
- Deposit insurance cover: ₹5 lakh per depositor per bank since 4 February 2020.
- The cover includes both principal and interest.
- DIC started on 1 January 1962; DICGC was formed on 15 July 1978.
- The premium (12 paise per ₹100) is paid by banks, not depositors.
- PACS are not covered; foreign bank branches in India are covered.
- Govt, foreign govt and inter-bank deposits are not insured.
- Under the 2021 amendment, depositors get paid within 90 days of a moratorium.
Related reading
Quiz: test yourself
Based on the DICGC Act and DICGC publications as reported. Check dicgc.org.in for the latest cover and list of insured banks.