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DICGC

Introduction

DICGC plays a crucial role in protecting bank depositors in India. Questions on DICGC are very common in banking exams because they test awareness of deposit insurance, depositor protection, and RBI-linked institutions.

Pattern: DICGC

Pattern

DICGC provides insurance cover to bank deposits, ensuring protection to depositors in case a bank fails or is liquidated.

Step-by-Step Example

Question

What is the maximum amount insured by DICGC for a depositor in a bank?

A. ₹1,00,000
B. ₹2,00,000
C. ₹5,00,000
D. ₹10,00,000

Solution

  1. Step 1: Understand DICGC’s core function

    DICGC insures bank deposits to protect depositors against bank failure.

  2. Step 2: Recall the current insurance limit

    The insured amount was enhanced to ₹5,00,000 per depositor per bank.

  3. Final Answer:

    ₹5,00,000 → Option C

  4. Quick Check:

    DICGC deposit insurance limit = ₹5 lakh ✅

Quick Variations

• DICGC establishment year and headquarters

• DICGC as a subsidiary of RBI

• Types of banks covered under DICGC

• Statement-based questions on depositor protection

Trick to Always Use

  • Step 1 → If the question mentions deposit insurance, think DICGC.
  • Step 2 → Remember the fixed figure: ₹5,00,000 per depositor per bank.

Summary

Summary

  • DICGC protects bank depositors through deposit insurance.
  • The maximum insured amount is ₹5,00,000 per depositor per bank.
  • DICGC is a wholly owned subsidiary of RBI.
  • It covers commercial banks, RRBs, and cooperative banks.

Example to remember:
If a bank fails, DICGC protects deposits up to ₹5 lakh.

Practice

(1/5)
1. DICGC was established in which year to provide deposit insurance in India?
easy
A. 1978
B. 1961
C. 1982
D. 1992

Solution

  1. Step 1: Recall the origin of DICGC

    DICGC was created to safeguard bank depositors.

  2. Step 2: Identify the correct year

    DICGC was established in 1961.

  3. Final Answer:

    1961 → Option B

  4. Quick Check:

    DICGC = early 1960s depositor protection initiative ✅
Hint: Deposit insurance in India began in the early 1960s.
Common Mistakes: Confusing DICGC’s year with NABARD (1982) or SEBI (1992).
2. Deposit Insurance and Credit Guarantee Corporation is a wholly owned subsidiary of which institution?
easy
A. Government of India
B. State Bank of India
C. Reserve Bank of India
D. NABARD

Solution

  1. Step 1: Identify DICGC’s ownership

    DICGC functions under a major financial authority.

  2. Step 2: Select the correct parent institution

    DICGC is a wholly owned subsidiary of the Reserve Bank of India.

  3. Final Answer:

    Reserve Bank of India → Option C

  4. Quick Check:

    Deposit insurance + RBI link = DICGC ✅
Hint: RBI subsidiary dealing with deposits = DICGC.
Common Mistakes: Assuming DICGC is directly owned by the Government.
3. Which of the following banks is covered under DICGC deposit insurance?
easy
A. Foreign banks only
B. Commercial banks, RRBs, and cooperative banks
C. Non-banking financial companies
D. Insurance companies

Solution

  1. Step 1: Understand the scope of DICGC coverage

    DICGC insures deposits held in specific types of banks.

  2. Step 2: Identify the correct group

    Commercial banks, Regional Rural Banks, and cooperative banks are covered.

  3. Final Answer:

    Commercial banks, RRBs, and cooperative banks → Option B

  4. Quick Check:

    Most deposit-taking banks = DICGC coverage ✅
Hint: If it accepts deposits as a bank, DICGC usually covers it.
Common Mistakes: Assuming NBFC deposits are insured by DICGC.
4. The maximum deposit insurance cover provided by DICGC is applicable on which basis?
medium
A. Per account per bank
B. Per depositor per bank
C. Per family per bank
D. Per branch per bank

Solution

  1. Step 1: Recall how deposit insurance is calculated

    DICGC insurance is linked to depositors, not accounts.

  2. Step 2: Identify the correct basis

    The insurance limit applies per depositor per bank.

  3. Final Answer:

    Per depositor per bank → Option B

  4. Quick Check:

    Multiple accounts in one bank = still one insurance limit ✅
Hint: One depositor + one bank = one insurance cover.
Common Mistakes: Assuming each account gets separate insurance.
5. Which of the following best explains the primary objective of DICGC?
medium
A. To regulate banks
B. To insure deposits and protect depositors
C. To provide refinance to banks
D. To control inflation

Solution

  1. Step 1: Identify DICGC’s core purpose

    DICGC was created for depositor safety.

  2. Step 2: Match the correct objective

    Deposit insurance and depositor protection define DICGC’s role.

  3. Final Answer:

    To insure deposits and protect depositors → Option B

  4. Quick Check:

    Depositor safety = DICGC’s mission ✅
Hint: Deposit insurance always points to depositor protection.
Common Mistakes: Confusing DICGC’s role with RBI’s regulatory functions.

Mock Test

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