DICGC: Deposit Insurance and Credit Guarantee Corporation

For over 40 years, DICGC insured bank deposits but set no deadline to pay them out. That changed in 2021.

Timeline

• 1962: The Deposit Insurance Corporation (DIC) begins operations, under the Deposit Insurance Corporation Act, 1961.
• 15 July 1978: DIC merges with the Credit Guarantee Corporation of India, forming DICGC.
• 4 February 2020: The deposit insurance cover is raised from Rs 1 lakh to Rs 5 lakh.
• 1 September 2021: The DICGC (Amendment) Act, 2021 takes effect, adding a 90-day interim-payment rule.

Must Know

• DICGC stands for the Deposit Insurance and Credit Guarantee Corporation.
• It is a wholly owned subsidiary of the Reserve Bank of India.
• DICGC insures bank deposits, up to Rs 5 lakh per depositor, per bank.
• It was formed on 15 July 1978, by merging India’s deposit insurance and credit guarantee bodies.
• DICGC is headquartered in Mumbai, Maharashtra.

Good to Know

• DICGC traces back to the Deposit Insurance Corporation (DIC), which began operations in 1962.
• DIC merged with the Credit Guarantee Corporation of India, set up in 1971, to form DICGC.
• The deposit insurance cover was raised from Rs 1 lakh to Rs 5 lakh, on 4 February 2020, after the Punjab and Maharashtra Cooperative Bank crisis.
• DICGC insures deposits in commercial banks, regional rural banks, and cooperative banks.
• DICGC funds itself through insurance premiums, paid by its member banks.

Test Yourself

Please wait…

1. On what date was DICGC formed, by merging the Deposit Insurance Corporation with the Credit Guarantee Corporation of India?

15 July 1978

1 January 1962

4 February 2020

1 September 2021

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Great to Know

• The DICGC (Amendment) Act, 2021 added Section 18A, giving depositors a 90-day interim payout, when RBI restricts a bank.
• Under Section 18A, the stressed bank must report claimant details within 45 days. DICGC must then pay within the next 45 days.
• In 2025-26, DICGC settled claims worth Rs 1,988 crore, for depositors of 72 urban cooperative banks.
• RBI restricted New India Co-operative Bank in February 2025. DICGC processed Section 18A claims, and later extended its payment deadline to 12 August 2025.
• As of 2026, the Government is still considering a proposal to raise the deposit insurance cover above Rs 5 lakh. No final decision has been announced.

Current Affairs

• 2025-2026: DICGC’s Section 18A rule is tested by a real bank crisis.
  • RBI restricted New India Co-operative Bank, Mumbai, on 13 February 2025, barring new loans and withdrawals.
  • DICGC began processing interim payments, of up to Rs 5 lakh each, for the bank’s roughly 1.25 lakh depositors.
  • It extended its payment deadline to 12 August 2025, to allow more time for claim verification.
  • Across all such cases in 2025-26, DICGC settled claims worth Rs 1,988 crore, covering 72 urban cooperative banks.