Deposit Insurance
Economic literature points out that deposit insurance is not insurance of deposits per se but insurance against instability in the system consequent upon the failure of one or more banks.
Insurance of bank deposits is intended to give a measure of protection to depositors, particularly the smaller depositors, from the risk of loss of their savings arising from bank failures. Such protection infuses confidence in the minds of the public and contributes to the growth of the banking system by assisting in development of banking habits and mobilization of resources by the bank. These resources in turn can be utilized for purposes which are accorded national priority. Establishment of the Deposit Insurance Corporation came in the wake of certain bank failures in fifties and early sixties and consequent efforts to restore the confidence of the depositing public in the banking system by safeguarding their interests.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) is the only organisation that provides Deposit Insurance in India.
Click for news on Deposit Insurance.
Individuals
Home
