DICGC, a wholly-owned subsidiary of the Reserve Bank of India (RBI), provides insurance for bank deposits up to the limit fixed by the Corporation.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) has collected Rs 88,523 crore as premium from banks, and the total payout to depositors of failed commercial banks on account of claims stood at Rs 296 crore, the Rajya Sabha was informed on Tuesday. DICGC, a wholly-owned subsidiary of the Reserve Bank of India (RBI), provides insurance for bank deposits up to the limit fixed by the Corporation.
“Since the inception of deposit insurance, the total premium paid by commercial banks is Rs 88,523 crore and the total payout to depositors of failed commercial banks on account of claims is Rs 296 crore,” said Minister of State for Finance Anurag Thakur in a written reply in the Upper House. On whether the government will consider hiking the insurance cover cap that was revised more than 25 years ago, Thakur said no proposal has been received from the RBI in this regard.
DICGC provides an insurance coverage of up to Rs 1 lakh to a depositor of a bank. He further said the DICGC Act, 1961, provides that the Corporation may, from time to time, having regard to its financial position and to the interest of the banking system, raise, with the previous approval of the government, the financial limit of the total amount payable to one depositor in respect of his deposit at all the branches of a bank taken together.
The RBI had constituted a committee under the chairmanship of M Damodaran to look into banking services rendered to retail and small customers, including pensioners, and also to look into the system of grievance redressal mechanism prevalent in banks, its structure and efficacy and suggest measures for expeditious resolution of complaints. The panel had, inter-alia, recommended that the deposit insurance cover provided by DICGC should be raised to Rs 5 lakhs so as to encourage individuals to keep all their deposits in a bank convenient for them.