| show details Jul 9 |
How this DICGC Scheme works?
In the event of a bank failure, DICGC protects bank deposits that are payable in India.
The DICGC insures all deposits such as savings, fixed, current, recurring, etc. except the following types of deposits.
(i) Deposits of foreign Governments;
(ii) Deposits of Central/State Governments;
(iii)Inter-bank deposits;
(iv) Deposits of the State Land Development Banks with the State co-operative bank;
(v) Any amount due on account of any deposit received outside India
(vi) Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.
Deposits in scheduled banks are insured up to Rs 1 lakh for that each schedule banks needs to pay certain premium to DICGC. So, if a bank goes into liquidation, the depositor is paid up to a maximum of Rs 1 lakh. 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. If you have deposits with more than one bank, deposit insurance coverage limit is applied separately to the deposits in each bank. The DICGC insures principal and interest upto a maximum amount of Rs. One lakh. Banks have the right to set off their dues from the amount of deposits. The deposit insurance is available after netting of such dues.
Please note the following points in this connection.
1) Regardless of the number of accounts and branches in which the amount is deposited, the insurance cover is for the actual amount of loss, subject to a maximum of Rs. 1 lakh per individual per bank. Suppose you deposited Rs. 5 lakh each in 3 different branches of the same bank, as per rule you are eligible to get only Rs. 1 lakh insurance cover.
2) If the same individual operates different accounts in different capacities, each account would be insured up to Rs. 1 lakh separately.
2) In the case of joint accounts, accounts in various combinations of the same persons are added together and the combined total is insured up to Rs 1 lakh. Thus, when there are two accounts – one in the name of husband and wife and the other wife and husband – the insurance on the two accounts will be Rs 1 lakh. However, if the husband has one independent account and the wife has another, each account would be separately insured up to Rs 1 lakh. Although, logically, this may sound absurd, the scheme of insurance has been drafted in this fashion.
How will you know whether your bank is insured by the DICGC or not?
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. My opinion all bank customers’ especially those who are having accounts with co-operative and regional banks must do this once in a while.
Conclusion
In India, RBI has given license to so many Scheduled Commercial Banks/ Regional Rural Banks promoted by various companies and individuals and more over RBI has got strict control over all these banks operating in both private and public sector. As an investor, we must ensure to deposit or bank with a well-established banks to minimize the risk. In the present situation Rs.1 lakh insurance cover is nothing, so there is a need for further increases in the insurance cover provided by DICGC
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