New FAQ Page 2 - RBI - Reserve Bank of India
Deposit Insurance
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.
Cooperative Banks : All State, Central and Primary cooperative banks, also called urban cooperative banks, functioning in States / Union Territories which have amended the local Cooperative Societies Act empowering the Reserve Bank of India (RBI) to order the Registrar of Cooperative Societies of the State / Union Territory to wind up a cooperative bank or to supersede its committee of management and requiring the Registrar not to take any action regarding winding up, amalgamation or reconstruction of a co-operative bank without prior sanction in writing from the RBI are covered under the Deposit Insurance Scheme. At present all co-operative banks are covered by the DICGC.
Primary cooperative societies are not insured by the DICGC.
-
The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits
-
Deposits of foreign Governments;
-
Deposits of Central/State Governments;
-
Inter-bank deposits;
-
Deposits of the State Land Development Banks with the State co-operative bank;
-
Any amount due on account of and deposit received outside India
-
Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India
If an individual opens more than one deposit account in one or more branches of a bank for example, Shri S.K. Pandit opens one or more savings/current account and one or more fixed/recurring deposit accounts etc., all these are considered as accounts held in the same capacity and in the same right. Therefore, the balances in all these accounts are aggregated and insurance cover is available upto rupees five lakhs in maximum.
If Shri S.K. Pandit also opens other deposit accounts in his capacity as a partner of a firm or guardian of a minor or director of a company or trustee of a trust or a joint account, say with his wife Smt. K. A. Pandit, in one or more branches of the bank then such accounts are considered as held in different capacity and different right. Accordingly, such deposits accounts will also enjoy the insurance cover upto rupees five lakhs separately.
It is further clarified that the deposit held in the name of the proprietary concern where a depositor is the sole proprietor and the amount of Deposit held in his individual capacity are aggregated and insurance cover is available upto rupees five lakhs in maximum.
Illustrations
Savings A/C | Current A/C | FD A/C | Total Deposits | Deposits Insured upto | |
Shri S. K. Pandit (Individual) | 4,17,200 | 22,000 | 80,000 | 5,19,200 | 5,00,000 |
Shri S. K. Pandit (Partner of ABC & Co.) | 4,75,000 | 50,000 | 5,25,000 | 5,00,000 | |
Shri S. K. Pandit (Guardian for Master Ajit) | 97,800 | 3,80,000 | 4,77,800 | 4,77,800 | |
Shri S. K. Pandit (Director, J.K. Udyog Ltd.) | 4,30,000 | 2,45,000 | 6,75,000 | 5,00,000 | |
Shri S. K. Pandit jointly with Smt. K. A. Pandit | 87,500 | 4,50,000 | 70000 | 6,07,500 | 5,00,000 |
Deposits held in joint accounts (revised w.e.f. April 26, 2007) |
If more than one deposit accounts (Savings, Current, Recurring or Fixed deposit) are jointly held by individuals in one or more branch of a bank say three individuals A, B & C hold more than one joint deposit accounts in which their names appear in the same order then all these accounts are considered as held in the same capacity and in the same right. Accordingly, balances held in all these accounts will be aggregated for the purpose of determining the insured amount within the limit of ₹ 5 lakhs.
However, if individuals open more than one joint accounts in which their names are not in the same order for example, A, B and C; C, B and A; C, A and B; A, C and B; or group of persons are different say A, B and C and A, B and D etc. then, the deposits held in these joint accounts are considered as held in the different capacity and different right. Accordingly, insurance cover will be available separately upto rupees five lakhs to every such joint account where the names appearing in different order or names are different.
Illustrations
Account (i) (Savings or Current A/C) |
First a/c holder- "A" Second a/c holder - "B" |
Maximum insured amount upto ₹ 5 lakh |
Account (ii) | First a/c holder - "A" Second a/c holder - "C" |
Maximum insured amount upto ₹ 5 lakh |
Account (iii) | First a/c holder - "B" Second a/c holder - "A" |
Maximum insured amount upto ₹ 5 lakh |
Account (iv) at Branch ‘X’ of the bank | First a/c holder - "A" Second a/c holder - "B" Third a/c holder - "C" |
Maximum insured amount upto ₹ 5 lakh |
Account (v) | First a/c holder - "B" Second a/c holder - "C" Third a/c holder - "A" |
Maximum insured amount upto ₹ 5 lakh |
Account (vi)(Recurring or Fixed Deposit) |
First a/c holder - "A" Second a/c holder - "B" |
The account will be clubbed with the a/c at (i) |
Account (vii) At Branch ‘Y’ of the bank |
First a/c holder - "A" Second a/c holder - "B" Third a/c holder - "C" |
The account will be clubbed with the a/c at (iv) |
Account (viii) | First a/c holder - "A" Second a/c holder - "B" Third a/c holder - "D" |
Maximum insured amount upto ₹ 5 lakh |
If a bank goes into liquidation, DICGC is liable to pay to the liquidator the claim amount of each depositor upto Rupees five lakhs within two months from the date of receipt of claim list from the liquidator. The liquidator has to disburse the claim amount to each insured depositor corresponding to their claim amount."
If a bank is reconstructed or amalgamated / merged with another bank: The DICGC pays the bank concerned, the difference between the full amount of deposit or the limit of insurance cover in force at the time, whichever is less and the amount received by him under the reconstruction / amalgamation scheme within two months from the date of receipt of claim list from the transferee bank / Chief Executive Officer of the insured bank/transferee bank as the case may be."
The Corporation has deposit insurance liability on liquidation etc. of "Insured banks" i.e. banks which have been de-registered (a) on account of prohibition on receiving fresh deposits or (b) on cancellation of license or it is found that license cannot be granted. The liability of the Corporation in these cases is limited to the extent of deposits as on the date of cancellation of registration of bank as an insured bank.
On liquidation etc. of other de-registered banks i.e. banks which have been de-registered on other grounds such as non payment of premium or their ceasing to be eligible co-operative banks under section 2(gg) of the DICGC Act, 1961, the Corporation will have no liability.
Notice: Information given above is to convey the basic provisions of the deposit insurance scheme of the Corporation. The information is of a non-technical nature and is not intended to be a legal interpretation of the deposit insurance scheme.
Page Last Updated on: December 11, 2022