The full form of DICGC is Deposit Insurance and Credit Guarantee Corporation.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) plays a vital role in the financial system of India. It functions as the deposit insurer and credit guarantor for banks in India. Its primary purpose is to protect depositors' money in case a bank fails.
Here's a breakdown of its functions and significance:
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Deposit Insurance: The DICGC insures deposits up to a certain limit (currently ₹5 lakh) per depositor per bank. This coverage extends to various types of deposits, including savings, fixed, current, and recurring deposits. If a bank goes bankrupt, the DICGC is liable to pay each depositor through the liquidator, up to ₹5 lakh.
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Credit Guarantee: DICGC also provides guarantees for credit facilities extended to small borrowers, particularly in the priority sector. This encourages banks to lend to sectors like agriculture and small-scale industries, which might otherwise face difficulty accessing credit.
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Objectives: The main objectives of DICGC are to maintain financial stability, protect depositors, and promote confidence in the banking system.
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Establishment: The DICGC was established in 1978 by merging the Deposit Insurance Corporation (DIC) and the Credit Guarantee Corporation of India Ltd. (CGCI).
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Wholly Owned Subsidiary: It is a wholly-owned subsidiary of the Reserve Bank of India (RBI).
In summary, the DICGC provides crucial financial safety nets for depositors and supports lending to key sectors of the economy, contributing significantly to the stability and growth of India's financial landscape.
