A guarantee that protects bank depositors up to a fixed amount if their bank fails, administered in India by the Deposit Insurance and Credit Guarantee Corporation, a wholly owned subsidiary of the RBI.
- The DICGC was set up under the DICGC Act, 1961; it is owned by the RBI and insures deposits held in commercial banks, co-operative banks and Regional Rural Banks.
- The insurance cover was raised to 5 lakh rupees per depositor per bank in 2020, covering both principal and interest, across savings, current, fixed and recurring deposits.
- If a depositor holds accounts in several capacities or in different banks, each is insured separately up to the limit; banks pay the insurance premium, not depositors.
- The 2021 amendment lets depositors of a stressed bank under moratorium receive up to the insured amount within 90 days, without waiting for liquidation.
- It complements the RBI's role as lender of last resort in protecting small depositors and maintaining confidence.
The 5 lakh rupees cover, the DICGC's status as an RBI subsidiary, and its 1961 statutory basis are clean, frequently asked banking facts.
Deposit insurance (protects the depositor up to 5 lakh rupees) versus the lender-of-last-resort role (supports the bank); the premium is paid by the bank, not the depositor.
DICGC (an RBI subsidiary under the 1961 Act) insures bank deposits up to 5 lakh rupees per depositor per bank; premium paid by banks.