What is DICGC?

• Deposit Insurance and Credit Guarantee Corporation (DICGC) is a wholly owned subsidiary of the RBI, created by an act of parliament in 1961.

• The idea behind the DICGC is to boost the faith of the public in the banking system, and provide protection against the loss of deposits to a significant extent.
• Banks covered by Deposit Insurance Scheme: All commercial banks, Local Area Banks, Regional Rural Banks and Co-operative Banks that are licensed by the RBI.

• The deposit insurance system plays an important role in maintaining the stability of the financial system, particularly by assuring the small depositors of the protection of their deposits in the event of a bank failure.

What does the DICGC insure?

• DICGC insures all deposits such as savings, fixed, current and recurring including accrued interest. 
• Each depositor in a bank is insured up to a maximum of Rs 5 lakh for both principal and interest amount held by them as on the date of liquidation or failure of a bank.