How safe is your deposit if your bank undergoes a crisis? Who guarantees that you won’t lose the money deposited in the bank? Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI is set up to insure the deposits held by the banks. They also guarantee credit facilities. Deposit insurance coverage is a facility that provides protection cover against losses to deposit holders in banks in case the bank fails financially. Amount to be paid as a premium or this policy is covered entirely by the insured bank for all the depositors.
₹ 5 lakhs is the maximum limit up to which a particular depositor is insured. It is applicable for both principal and interest amounts held by the depositor.
Printed leaflets are given by the DICGC while registering the banks as insured banks. These leaflets display information concerning the protection offered by the corporation to the depositors of the insured banks. In case of doubt, the depositor should make a specific inquiry to the bank in this regard.
DICGC is liable to pay when a bank goes into liquidation. DICGC is liable to pay the claim amount within two months from the date of receiving the claim from the liquidator. The liquidator is required to disburse the claim amount to every insured depositor.
In case of a merger, the DICGC pays the insured bank the difference between the full amount of deposit or the limit of insurance cover, whichever is less.
It also makes payment of the amount received by the bank under the reconstruction scheme. The amount can be claimed within two months from the date of receipt of the claim list from the transferee bank.
Deposits held in the same name or are under a similar type of ownership at the same bank are added together before deposit insurance is determined. The deposit insurance coverage limit is applied separately to the deposits in the respective banks if any depositor has holdings in more than one bank.
Before opening a bank account, it’s imperative to ensure that the bank is protected under deposit insurance coverage. As with this insurance coverage, your hard-earned money and savings are protected from any kind of unwanted losses.
Are you looking for a new insurance policy or a policy renewal? Reach out to us and let us assist you.