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Deposit Insurance and Credit Guarantee Corporation (DICGC)

 

Deposit Insurance and Credit Guarantee Corporation (DICGC)


What it is:
The DICGC is a subsidiary of the Reserve Bank of India (RBI) providing deposit insurance to protect bank depositors’ money during bank failures.

History:

  • Considered in 1948 after Bengal banking crises.
  • Enacted in 1961 as the Deposit Insurance Corporation Act.
  • Merged with Credit Guarantee Corporation in 1978 under the Ministry of Finance.

Functions:

  • Insures bank deposits.
  • Provides credit guarantees for priority sectors.

Features:

  • Deposit limit: ₹5 lakh per depositor.
  • Covers savings, fixed, current, and recurring deposits.
  • Does not cover government deposits or foreign deposits.

MCQs for UPSC CSE:

  1. Which organization provides deposit insurance in India?
    A) SEBI
    B) NABARD
    C) DICGC
    D) EXIM Bank

    Answer: C) DICGC

  2. What is the maximum deposit insurance limit under DICGC?
    A) ₹1 lakh
    B) ₹2 lakh
    C) ₹5 lakh
    D) ₹10 lakh

    Answer: C) ₹5 lakh

  3. When was the DICGC formed by merging the Deposit Insurance Corporation and the Credit Guarantee Corporation?
    A) 1961
    B) 1978
    C) 1985
    D) 2000

    Answer: B) 1978

Mains Question:

Discuss the role of the Deposit Insurance and Credit Guarantee Corporation (DICGC) in safeguarding depositor confidence in the Indian banking system. Highlight its features, coverage, and recent changes.

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