Economics • Banking & FinanceMedium
What is the primary statutory function of the 'Deposit Insurance and Credit Guarantee Corporation (DICGC)' in India?
A. To provide crop insurance to farmers against unseasonal rainfall and pest attacks
B. To insure all bank deposits up to a prescribed monetary limit per depositor per bank in the event of bank failure✓ Correct Answer
C. To regulate foreign exchange transactions and monitor cross-border capital flows
D. To refinance regional rural banks for rural electrification programs
💡 Solution & Explanation
Deposit Insurance and Credit Guarantee Corporation is a specialized subsidiary of the Reserve Bank of India established to provide deposit insurance and credit guarantee facilities to banks operating in India. It insures all eligible bank deposits, including savings, fixed, current, and recurring deposits, up to a statutory limit of five lakh rupees per depositor per bank. Commercial banks, local area banks, and regional rural banks are covered under its insurance scheme. Premium payments for this insurance are borne entirely by the insured banks without imposing any burden on depositors.
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