In 2020, the Deposit Insurance and Credit Guarantee Corporation (DICGC) was permitted to increase deposit insurance coverage to _____.

Question

Question

This question was previously asked in

SSC MTS 2020 (Held On : 18 Oct 2021 Shift 2 ) Official Paper 26

Answer 1

The correct answer is Rs. 5 lakh.

Key Points

The Indian Union Budget 2020 announced that the Deposit Insurance and Credit Guarantee Corporation (DICGC) has been permitted to increase deposit insurance coverage to Rs. 5 lakh per depositor from Rs. 1 lakh previously. Hence, Option 3 is correct.

Important Points

Deposit Insurance and Credit Guarantee Corporation
- It was established in 1978 after the merger of Deposit Insurance Corporation (DIC) and Credit Guarantee Corporation of India Ltd. (CGCI) after the passing of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 by the Parliament.
- It is a wholly-owned arm of the Reserve Bank of India (RBI), which offers deposit insurance.
- It ensures deposit accounts, such as savings, current, recurring, and fixed deposits up to a limit of Rs 5 lakh per account holder of a bank.
- If a customer’s deposit amount crosses Rs 5 lakh in a single bank, only up to Rs 5 lakh, including the principal and interest, will be paid by the DICGC if the bank turns bankrupt.
- Coverage: Deposits in public and private sector banks, local area banks, small finance banks, regional rural banks, cooperative banks, Indian branches of foreign banks, and payments banks are all insured by the DICGC.