DICGC

## What DICGC is The Deposit Insurance and Credit Guarantee Corporation is a wholly owned subsidiary of the RBI that provides insurance on bank deposits. If an insured bank fails or is liquidated, DICGC pays each depositor up to a statutory limit, protecting ordinary savers from losing their money when a bank collapses. It is the safety net behind the trust people place in bank deposits.

## The coverage and the limit The current cover is ₹5 lakh per depositor per bank, raised from ₹1 lakh in 2020. This ₹5 lakh includes both principal and interest and applies to your combined deposits across all branches of the same bank — savings, current, fixed and recurring deposits taken together. Crucially, the limit is per bank, so deposits in *different* banks are each separately insured up to ₹5 lakh. Money held in different ownership capacities (e.g. individual vs joint vs as a partnership) is also treated as separately insured.

DICGC covers commercial banks, small finance banks, payments banks, regional rural banks and cooperative banks — virtually all banks in India. The premium is paid by the banks, not depositors. Under the DICGC (Amendment) Act, 2021, depositors of a bank placed under RBI moratorium can get up to ₹5 lakh within 90 days, a reform prompted by episodes like PMC Bank.

## What it does *not* cover DICGC insures bank deposits only. It does not cover mutual funds, stocks, bonds, NPS, or government securities — these carry market risk and have no deposit-insurance backstop. This is the key point for an investor: the safety of a bank FD and the risk of a debt mutual fund are entirely different things.

## Practical takeaways - For amounts above ₹5 lakh, spread deposits across multiple banks (or ownership categories) to maximise cover. - Don't confuse DICGC protection with investment products — liquid and debt funds are not insured, even if they feel "safe." - Cooperative-bank depositors especially should note the ₹5 lakh cap, since cooperative-bank failures are where DICGC payouts have most often been triggered.