A cooperative bank in your town is suddenly put under RBI restrictions and you cannot withdraw your own fixed deposit. This is exactly the situation deposit insurance exists for. The Deposit Insurance and Credit Guarantee Corporation, a wholly owned subsidiary of the RBI, insures your bank deposits up to ₹5 lakh and can now pay you an interim amount within 90 days, even before the bank is wound up.
Quick answer: DICGC insures bank deposits up to ₹5 lakh per depositor per bank, covering principal and interest together. You do not apply or pay for it. If the RBI places a bank under All Inclusive Directions, Section 18A of the DICGC Act lets you receive up to ₹5 lakh as an interim payment within 90 days. On liquidation, DICGC pays through the liquidator.
DICGC is a subsidiary of the Reserve Bank of India that insures deposits in banks. It covers savings, current, fixed, and recurring deposits held in commercial banks, small finance banks, payments banks, and most cooperative banks. The bank pays the premium, not you, so the cover is automatic on every insured deposit you hold up to the limit.
The governing law is the Deposit Insurance and Credit Guarantee Corporation Act 1961. The key features are:
The 90-day clock works in stages. The bank under directions must furnish the depositor-wise list to DICGC within 45 days of the restrictions. DICGC verifies the claims within 30 days of receiving the list, and pays depositors within 15 days of completing verification, so the total time does not exceed 90 days. If the bank's licence is cancelled and it goes into liquidation, DICGC settles the insured amount through the liquidator.
RTI angle: The RBI is a public authority under the Right to Information Act 2005. If your bank is under directions and you are unsure of the status, an RTI to the RBI can confirm the date the directions were imposed and the action taken, while questions on your specific claim are best raised with the bank and DICGC. Knowing the date the restrictions started lets you track the 90-day interim payment window.
Real-life example: Lakshmi Rao of Hyderabad held ₹4.6 lakh across a savings account and an FD in a cooperative bank that the RBI suddenly placed under All Inclusive Directions. She updated her KYC and account details, kept her FD receipts ready, and tracked the date the directions took effect. The bank submitted the depositor list to DICGC, and she received her insured amount as an interim payment within the 90-day window, without paying any fee for the cover.
DICGC insures up to ₹5 lakh per depositor per bank, covering principal and interest together. Deposits in all branches of the same bank are added up for this single limit.
No. The cover is automatic on insured deposits, and the bank pays the premium. You do not buy a policy or file anything in advance to be covered.
Under Section 18A of the DICGC Act, when the RBI places a bank under directions, DICGC must make an interim payment up to ₹5 lakh within 90 days. The bank submits the depositor list within 45 days, and verification and payment follow.
It is per depositor per bank, in the same right and capacity. Multiple accounts in the same bank are combined, but deposits in different banks are each separately insured up to ₹5 lakh.
Yes. Most cooperative banks are insured by DICGC, along with commercial banks, small finance banks, and payments banks. You can confirm a bank's insured status from the DICGC website.
If the licence is cancelled and the bank goes into liquidation, DICGC pays the insured amount up to ₹5 lakh through the liquidator, who distributes it to depositors.
Because the cover is per bank, spreading large savings across different banks keeps more of your money within the insured limit. Within one bank, anything above ₹5 lakh is not fully insured.