We keep our money in the bank thinking it is a safe place. Most of us open FDs in banks as investments. But what if, in a very unlikely event, the bank itself runs into trouble? That’s where the Deposit Insurance and Credit Guarantee Corporation (DICGC) comes in, like a friendly financial firefighter.
Think of DICGC as a kind of insurance for your bank deposits. It’s a government agency that steps in to protect your hard-earned money if the bank you chose is unable to pay you back. This applies to various accounts you might have, like savings, fixed deposits, or even your current account, up to a limit of Rs. 5 lakh.
Even if you have more than Rs. 5 lakh in a single bank, DICGC will only cover up to that amount in case of an unfortunate bank failure. The good news is that deposits in different branches of the same bank are added together when calculating this limit. So, spreading your savings across different branches within the same bank can offer some additional peace of mind. While the chances of a bank failing are very low, DICGC acts as an extra layer of security, giving you peace of mind knowing your money is protected, up to a certain limit, in case of unforeseen circumstances.
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How does DICGC Work?
The DICGC is like an insurance company for your money in the bank. If your bank runs into trouble and can’t give you your money back, DICGC can step in and pay you up to ₹5 lakh per account. This applies to most banks in India, including commercial banks, cooperative banks, and regional rural banks. However, the bank needs to be signed up with DICGC for this protection to apply.
The Deposit Insurance and Credit Guarantee Corporation Act, passed in 1961, sets the rules for the government agency DICGC. This agency protects your money in the bank by insuring your deposits, up to a certain amount. They also help small businesses by guaranteeing loans from banks. The Reserve Bank of India, which is the central bank of the nation, oversees the function of the agency.
What DICGC Does Not Cover?
- Deposits of state or Central governments
- Deposits from foreign governments
- State land development banks depositing with the state co-operative bank
- Inter-bank deposits
- Funds that are due on account of India and deposits received outside India
- Funds exempted by the corporation with the previous approval from RBI
How to Claim Your Money as per the DICGC Act?
The Deposit Insurance and Credit Guarantee Corporation (DICGC) protects your deposits up to a certain limit if your bank in India goes bankrupt. Here’s how to claim your insured amount:
1. Download and Fill the Claim Form:
- Get the form from the DICGC website or a designated DICGC officer.
- Fill it out carefully with your complete and accurate information.
2. Submit the Claim Form:
- You can submit the form in person to a DICGC officer or send it by registered post.
3. DICGC Verifies Your Claim:
- They will check your form details against the bank’s records.
- This verification typically takes a few weeks.
4. Receive Your Payment:
- Once verified, DICGC will transfer the insured amount to your bank account by NEFT.
This whole process can take up to 3 months from applying. So keep your patience and constantly track your claim status.
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FAQs
Is Stable Money safe?
Stable Money is India’s first digital fixed-return investment platform, and it is completely safe to invest. They do not keep your money for any point in time. Your money is directly sent to your bank account. There is no chance of any shady activity.
What is claims settlement?
Claims settlement refers to the process of DICGC paying insured depositors when their bank’s registration is canceled. They receive compensation based on their deposits and loans in the bank on a specific date (cut-off date), up to a maximum of ₹5 lakhs.
What is the time limit for a refund of the undisbursed amount to DICGC?
If an insured depositor doesn’t claim their money within four months of its release by DICGC, the liquidator managing the bank’s closure must return the unclaimed amount to DICGC within 15 days.
Is Stable Money RBI approved in India?
While Stable Money itself is not directly regulated by the RBI, all the banks that have partnered with Stable Money are regulated by the Reserve Bank of India (RBI).