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    Question

    Under the Deposit Insurance and Credit Guarantee

    Corporation Act, 1961, each depositor in an insured bank is entitled to a maximum insurance cover of:
    A ₹1,00,000 per depositor per bank for principal only, excluding interest Correct Answer Incorrect Answer
    B ₹5,00,000 per depositor per bank covering both principal and interest, held in the same right and same capacity Correct Answer Incorrect Answer
    C ₹2,00,000 per depositor per bank for savings and fixed deposits combined Correct Answer Incorrect Answer
    D ₹5,00,000 per depositor for all banks combined, not per individual bank Correct Answer Incorrect Answer

    Solution

    The DICGC insures each depositor for a maximum of ₹5,00,000 (Rupees Five Lakhs) per bank, covering both principal and interest, held in the same right and same capacity as on the date of liquidation, cancellation of licence, or imposition of All Inclusive Directions by the RBI. The insurance limit was raised from ₹1 lakh to ₹5 lakh in February 2020. The insurance premium is paid by the bank, not by the depositor, and cannot exceed 12 paise per annum per ₹100 of assessable deposits.

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