The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures your bank deposits up to ₹5,00,000 per depositor per bank, and that figure covers both your principal and any interest credited to the account. The DICGC is a wholly owned subsidiary of the Reserve Bank of India and operates under the DICGC Act, 1961.1Deposit Insurance and Credit Guarantee Corporation. About Us Coverage is automatic. You don’t apply for it, and you don’t pay for it.
Which Banks and Deposits Are Covered
Registration with the DICGC is mandatory for banks operating in India. Every commercial bank is covered: public sector banks, domestic private banks, branches of foreign banks in India, regional rural banks, and local area banks.2Reserve Bank of India. Deposit Insurance and Credit Guarantee Corporation FAQs All cooperative banks in India also fall under the scheme.3Deposit Insurance and Credit Guarantee Corporation. A Guide to Deposit Insurance
Insured banks are required to display DICGC leaflets at their branches. If you aren’t sure, ask a branch official. If a bank’s registration is ever cancelled for non-payment of premium, the DICGC announces it through newspapers.2Reserve Bank of India. Deposit Insurance and Credit Guarantee Corporation FAQs
On the deposit side, coverage applies to all standard account types: savings accounts, current accounts, fixed deposits, and recurring deposits. Both the principal and any interest credited up to the date the bank is closed or restricted are insured.3Deposit Insurance and Credit Guarantee Corporation. A Guide to Deposit Insurance
What Isn’t Insured
Four categories of deposits sit outside the scheme:
- Deposits of foreign governments and of the Central and State governments of India
- Inter-bank deposits
- Deposits held at branches located outside India
- Any deposits specifically exempted by the DICGC with prior RBI approval4Deposit Insurance and Credit Guarantee Corporation. DICGC – FAQs
NRO and NRE accounts held at branches inside India are not on the exclusion list and fall under the insurance umbrella like any other deposit.
How the ₹5 Lakh Limit Actually Works
The ₹5,00,000 cap comes from Section 16 of the DICGC Act. It applies per depositor, per bank, and combines principal and interest. Every branch of a single bank counts as the same bank for this purpose. So a savings account at one branch and a fixed deposit at another branch of the same bank are added together against one ₹5 lakh limit.4Deposit Insurance and Credit Guarantee Corporation. DICGC – FAQs
Different banks are treated independently. If you keep ₹5,00,000 in Bank A and another ₹5,00,000 in Bank B, both amounts are fully insured, giving you ₹10,00,000 of protection in total.2Reserve Bank of India. Deposit Insurance and Credit Guarantee Corporation FAQs Spreading larger balances across banks is the straightforward way to expand your coverage.
“Same Capacity and Same Right”
Within a single bank, deposits are pooled together only if you hold them in the same legal capacity. Deposits held in different capacities each get their own ₹5 lakh cover. Money you hold as an individual and money you hold as a guardian for a minor, for instance, are separate capacities and separately insured.2Reserve Bank of India. Deposit Insurance and Credit Guarantee Corporation FAQs
For joint accounts, the combination of names and the order in which they appear defines the capacity. A joint account with you listed first and your spouse second is a different capacity from one with your child listed first and you second. Each distinct combination gets its own ₹5 lakh limit.
Business and Partnership Accounts
Deposits held in your name as a partner in a firm are separate from deposits in your personal name. Both capacities are insured to the full ₹5 lakh at the same bank.3Deposit Insurance and Credit Guarantee Corporation. A Guide to Deposit Insurance
Sole proprietorships work the other way. A sole proprietor and the proprietary concern are the same legal person, so personal deposits and proprietary business deposits at the same bank are combined into one ₹5 lakh limit. If you run a sole proprietorship with meaningful balances in both accounts, the total insured amount is still ₹5,00,000.3Deposit Insurance and Credit Guarantee Corporation. A Guide to Deposit Insurance
When You Actually Get Paid
There are two situations where the DICGC pays out: when a bank is placed under restrictions (called All-Inclusive Directions, or AID) but not yet liquidated, and when a bank is being wound up.
For banks under AID, the DICGC (Amendment) Act, 2021 inserted Section 18A, which requires payment within 90 days of the restrictions being imposed.5Deposit Insurance and Credit Guarantee Corporation. DICGC (Amendment) Act, 2021 – Section 18A – Payment to Depositors of Insured Banks Under AID The 90 days break down like this:
- Days 1–45: the bank submits a list of all depositors and their outstanding balances to the DICGC
- Days 46–75: the DICGC verifies the claims and confirms each depositor’s willingness to receive payment
- Days 76–90: the DICGC pays depositors who have confirmed4Deposit Insurance and Credit Guarantee Corporation. DICGC – FAQs
Payment isn’t automatic. You have to approach the bank’s CEO or administrator, sign a willingness form, and submit attested copies of identity documents. The forms are available at the bank, and you can submit at any time while the bank is under AID.4Deposit Insurance and Credit Guarantee Corporation. DICGC – FAQs
Two things can shift the 90-day timeline. The RBI can extend the payment date by up to another 90 days if it needs more time to finalize a merger or resolution scheme. And if the RBI lifts the restrictions before the DICGC pays out, the bank goes back to serving depositors directly and the DICGC’s obligation to pay falls away.6Deposit Insurance and Credit Guarantee Corporation. DICGC Act 1961
If the Bank Is Liquidated
When a bank is wound up rather than restricted, a liquidator is appointed to prepare a depositor-wise claim list. The DICGC pays the insured amount to the liquidator within two months of receiving the verified list, and the liquidator then distributes it to individual depositors.4Deposit Insurance and Credit Guarantee Corporation. DICGC – FAQs
In a merger or amalgamation, the DICGC pays only the difference between what you had on deposit and what the acquiring bank honours. If the new bank pays out in full, the DICGC pays nothing.
What Happens to Money Above ₹5 Lakh
Anything above ₹5,00,000 is not covered by the DICGC payout, but it isn’t necessarily lost. Under Section 43A of the Banking Regulation Act, 1949, depositors get preferential treatment in the liquidation waterfall and are paid ahead of general creditors and shareholders from whatever assets the liquidator recovers.7International Financial Services Centres Authority. The Banking Regulation Act, 1949 Recoveries take years in practice and rarely cover the full uninsured balance. Splitting deposits across multiple banks is the most reliable way to protect larger sums.
Who Pays for the Insurance
Banks pay the DICGC premium out of their own funds. Depositors are never charged. The base rate is 12 paise per ₹100 of assessable deposits per year, paid in half-yearly installments.8Deposit Insurance and Credit Guarantee Corporation. DICGC Information Leaflet 2024-25 Coverage on your account exists automatically the moment your bank is registered with the DICGC. Nothing you do or don’t do affects it, other than the choice of how much to keep at any one bank.