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.

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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

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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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