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Concept of deposit insurance?

concept and working of deposit insurance introduction to DICGC?


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The aim of deposit insurance is to protect bank depositors from losses caused by a bank's inability to pay its debts. There are deposit insurance institutions in most countries. They are usually run by the government or by private entities with government backing. The Deposit Insurance and Credit Guarantee Corporation (DICGC) is the deposit insurance institution of India.

India introduced deposit Insurance in 1962, DICGC itself was created in 1978. DICGC is a wholly owned subsidiary of the Reserve Bank of India. Its Deposit Insurance Scheme covers the commercial banks including the branches of foreign banks functioning in India, local area banks, regional rural banks as well as most of co-operative banks. Any new banks are required to be registered at DICGC as insured banks. The insurance premium is paid by the insured banks.

If an insured bank is liquidated, every depositor of the bank is entitled for an amount equal to his deposits up to Rs. 1,00,000 per depositor. DICGC makes the payment to the liquidator for disbursement to the depositors. The liquidator is required to repay the amount to DICGC from the received from the assets of the failed bank.
Aug 26th, 2011 at 8:19 AM
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The aim of deposit insurance and when established in SA.
Aug 27th, 2012 at 6:56 AM
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