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Banking Awareness is considered to be the high scoring section in any competitive exam. It includes two main portions, current affairs GK and static GK. In this article, we will discuss some really important Banking Awareness topics that are covered in almost all competitive exams. Also, you can download the PDF of lists of different Banking Awareness topics.
In Banking Section, the questions are asked from following topics: History of Banking, banking terms, Marketing of Banking Products, Functions of Banks, Banks and their taglines, schemes, committees related to banking, headquarters of bank, some Banking news related, apps launched by banks, new schemes etc.
In a series of sharing useful study material for upcoming banking exams. Here, we are providing Banking Awareness notes for all banking Exams (IBPS, SBI & Other Banking Exams).
Deposit Insurance and Credit Guarantee Corporation of India (DICGC) : Banking Awareness Study Notes
What is Deposit Insurance Corporation and Credit Guarantee Corporation ?
DICGC stands for Deposit Insurance Corporation and Credit Guarantee Corporation, which is a 100% subsidiary of the Reserve Bank of India and was set up to provide deposit insurance to the banks in India.
DICGC was established on July 15, 1978, under the Deposit Insurance and Credit Guarantee Corporation Act, 1961. It provides insurance all kinds of banks deposits such as saving, current, recurring deposit, and fixed deposits.
The functions of the DICGC are governed by the provisions of ‘The Deposit Insurance and Credit Guarantee Corporation Act, 1961’ (DICGC Act) and ‘The Deposit Insurance and Credit Guarantee Corporation General Regulations, 1961’ framed by the Reserve Bank of India in the exercise of the powers conferred by sub-section (3) of Section 50 of the said Act.
The preamble of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 states that it is an Act to provide for the establishment of a Corporation for the purpose of insurance of deposits and guaranteeing of credit facilities and for other matters connected therewith or incidental thereto.
Which banks are insured by the DICGC?
Commercial Banks: All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC.
Cooperative Banks: All State, Central and Primary cooperative banks, also called urban cooperative banks, functioning in States / Union Territories which have amended the local Cooperative Societies Act empowering the Reserve Bank of India (RBI) to order the Registrar of Cooperative Societies of the State / Union Territory to wind up a cooperative bank or to supersede its committee of management and requiring the Registrar not to take any action regarding winding up, amalgamation or reconstruction of a co-operative bank without prior sanction in writing from the Reserve Bank are covered under the Deposit Insurance System. At present all co-operative banks other than those from the States of Meghalaya, and the Union Territories of Chandigarh, Lakshadweep and Dadra and Nagar Haveli are covered under the deposit insurance system of DICGC.
Primary cooperative societies are not insured by the DICGC.
What does the DICGC insure?
Ans: In the event of a bank failure, DICGC protects bank deposits that are payable in India. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. except the following types of deposits.
(i) Deposits of foreign Governments;
(ii) Deposits of Central/State Governments;
(iii)Inter-bank deposits;
(iv) Deposits of the State Land Development Banks with the State co-operative bank;
(vi) Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.
What is the maximum deposit amount insured by the DICGC?
Each depositor in a bank is insured upto a maximum of ₹ 5,00,000 (Rupees Five Lakhs) for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank’s licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force.
Features of DICGC
- A maximum of Rs 5,00,000 is insured for each user for both principal and interest amount.
- If the customer has accounts in different banks, they all account are insured to a maximum of Rs 5,00,000. However, if there are more accounts in same bank, they all are treated as a single account.
- The insurance premium is paid by the insured banks itself. This means that the benefit of deposit insurance protection is made available to the depositors or customers of banks free of cost.
- The Corporation has the power to cancel the registration of an insured bank if it fails to pay the premium for three consecutive half-year periods.
- The Corporation may restore the registration of the bank, which has been de-registered for non-payment of premium, if the concerned bank makes a request in this behalf and pays all the amounts due by way of premium from the date of default together with interest.
