During 2021-22, the Deposit Insurance and Credit Guarantee Corporation settled claims totaling Rs 8,516.6 crore from about 12.94 lakh depositors of dissolved banks, merged organisations, and those subject to Reserve Bank limitations.
The Deposit Insurance Scheme covers all commercial banks in India, including foreign bank branches, local area banks, regional rural banks, small financing banks, and payment banks.
According to the DICGC’s annual report, of the Rs 8,516.6 crore claims settled by the DICGC, Rs 5,059.2 crore were for liquidated and merged banks, and Rs 3,457.4 crore were for banks subject to the RBI’s All Inclusive Directions (AID).
According to the report, claims of Rs 5,059.18 crore were paid to roughly 10.34 lakh depositors of dissolved and amalgamated banks during the fiscal year ended March 2022.
Under AID, a total of Rs 3,457.44 crore was paid to about 2.6 lakh bank depositors. All of the claims involved cooperative banks.
The DICGC, a wholly owned subsidiary of the RBI, insures bank deposits.
The government extended the insurance cover on deposits by five times to Rs 5 lakh by 2020. The increased deposit insurance cover of Rs 5 lakh is effective on February 4, 2020.
According to the DICGC, the number of fully safeguarded accounts (256.7 crore) at the end of March 2022 represented 97.9% of the total number of accounts (262.2 crore) in the banking system, compared to the international standard of 80%.
The DICGC received a total premium of Rs 19,491 crore during 2021-22, with commercial banks contributing 93.6 percent and cooperative banks providing for the remaining 6.4 percent.
According to the research, a watershed moment in 2021-22 would be the revision to the DICGC Act 1961, which will allow the RBI to provide time-bound interim payments to depositors of banks placed under AID, a measure that is not common in other jurisdictions.