Deposit Insurance And Credit Guarantee Corporation Act 1961 Pdf

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Topics Covered:. What is deposit insurance?

Banks play a pivotal role in the life of general public by performing its basic function of Accepting deposits and Advancing loan but in the present scenario the crisis of banks have increased by creating fear in the minds of its customers of losing hard earned money even after depositing in nationalized banks. The fear of losing money is more in private banks compared to public banks as the private are not following the guidelines of RBI. Deposit Insurance and Credit Guarantee Corporation DICGC a subsidiary of Reserve Bank Of India has assured commercial banks to gain the trust of its customers and motivated small and medium depositors to keep faith on these financial institutions. DICGC works with the mission of bringing financial stability and securing public confidence in the banking system through provision of deposit insurance, particularly for the benefit of the small depositors.

Deposit Insurance and Credit Guarantee Corporation

It was established on 15 July under the Deposit Insurance and Credit Guarantee Corporation Act, for the purpose of providing insurance of deposits and guaranteeing of credit facilities. DICGC insures all bank deposits , such as saving, fixed, current, recurring deposit for up to the limit of Rs. However, if there are more accounts in same bank, all of those are treated as a single account. The insurance premium is paid by the insured banks itself. This means that the benefit of deposit insurance protection is made available to the depositors or customers of banks free of cost. The Corporation has the power to cancel the registration of an insured bank if it fails to pay the premium for three consecutive half-year periods. The Corporation may restore the registration of the bank if the bank makes a request and pays all the amounts due by way of premium from the date of default together with interest.

Ans: Commercial Banks: All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. Ans: Each depositor in a bank is insured upto a maximum of Rs. Ans: The DICGC while registering the banks as insured banks furnishes them with printed leaflets for display giving information relating to the protection afforded by the Corporation to the depositors of the insured banks. In case of doubt, depositor should make specific enquiry from the branch official in this regard. Ans: The deposits kept in different branches of a bank are aggregated for the purpose of insurance cover and a maximum amount upto Rupees one lakh is paid. One lakh.

Central Act

It was established on 15 July under the Deposit Insurance and Credit Guarantee Corporation Act, for the purpose of providing insurance of deposits and guaranteeing of credit facilities. DICGC insures all bank deposits, such as saving, fixed, current, recurring deposit for up to the limit of Rs. Commercial Banks: All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. The DICGC while registering the banks as insured banks furnishes them with printed leaflets for display giving information relating to the protection afforded by the Corporation to the depositors of the insured banks. In case of doubt, depositor should make specific enquiry from the branch official in this regard. What is the ceiling on amount of Insured deposits kept by one person in different branches of a bank?

If you have deposit in a bank and that bank go bankrupt in future then you will be given from DICGC. It was in the year that the concept of insuring deposits kept with banks received attention for the first time after the banking crises in Bengal. In it was again came in the limelight for the reconsideration. It was in the Rural Banking Enquiry Committee also supported the concept. It was after the crash of palai central bank ltd. After it was passed by the Parliament, the Bill got the assent of the President on December 7, and the Deposit Insurance Act, came into force on January 1,


An act to provide for the establishment of a corporation for the purpose of insurance of deposits and guaranteeing of credit facilities and for other matters connected therewith or incidental thereto. 1. (1) This Act may be called the Deposit Insurance and Credit Guarantee Corporation Act,


Deposit Insurance and Credit Guarantee Corporation (DICGC)

Highlights of the Bill. Key Issues and Analysis. Figure 1: Distribution of financial assets in India.

What is deposit insurance?

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