DICGC full form in banking is Deposit Insurance and Credit Guarantee Corporation. It is a subsidiary of the Reserve Bank of India (RBI) that provides insurance coverage for depositors’ funds in banks. Established in 1978, DICGC ensures that depositors receive compensation in case a bank fails or becomes insolvent.
Role of DICGC in Banking
DICGC plays a crucial role in protecting depositors by offering insurance coverage for their bank deposits. The key functions of DICGC include:
- Deposit Insurance: Providing insurance coverage of up to ₹5 lakh per depositor per bank, including principal and interest.
- Bank Supervision: Working under RBI guidelines to ensure financial stability in the banking system.
- Risk Mitigation: Reducing risks associated with bank failures and protecting small depositors.
- Coverage for Different Banks: Insuring deposits in commercial banks, cooperative banks, regional rural banks (RRBs), and local area banks.
DICGC Insurance Coverage
As per the latest guidelines, DICGC covers:
- Savings accounts, fixed deposits, recurring deposits, and current accounts.
- A maximum claim limit of ₹5 lakh per depositor per bank, regardless of the total balance.
- Coverage for all banks registered with DICGC, excluding primary cooperative societies.
Importance of DICGC in Banking
- Depositor Protection: Ensures that customers do not lose their money entirely in case of bank failures.
- Financial Stability: Enhances trust in the banking sector by reducing panic during crises.
- Regulatory Confidence: Supports RBI’s efforts in maintaining a secure banking environment.