Deposit Insurance and Credit Guarantee Corporation (DICGC) is a wholly owned subsidiary of Reserve Bank of India. It was established on July 15, 1978 under the Deposit Insurance and Credit Guarantee Corporation Act, 1961, for the purpose of providing insurance to depositors and guaranteeing of credit facilities. DICGC insures all types of bank deposits, such as saving and fixed up to the limit of Rs one lakh of each deposits in a bank.
In 1978 a sum of rupees one lakh was a huge amount to most middle class and retired account holders and they felt quite reassured at that time about the safety of money invested as fixed deposits in the banks.
With rising inflation and the value of Indian rupee eroding year after year, what was worth at that time as a lakh, now needs an amount almost equivalent of one crore.
However, unfortunately the Reserve Bank of India or the Finance Ministry over the years never considered to raise the value of protective insurance cover limit to funds lying with the banks.
Each time the account holders read about the collapse of banks (lately PMC bank), it sends shock waves of panic through their minds and many times restrictions placed by RBI on withdrawal of their own funds from the bank creates fear, frustration and untold misery.
It’s to be understood that those account holders specially the salaried employees without pension and retired people, do completely depend on the funds lying with the banks and the safety of their Principal Amounts is of paramount importance.
Also the amounts deposited as fixed deposits are white monies and are subjected to strict legal compliance from the part of the depositors such as providing PAN and even Aadhaar numbers.
So it’s but natural that the account holders to expect and insist on 100% guarantee from the Central Government and the RBI, that full safety will be provided to their Principal Amounts, with adequate insurance to cover any problems that may arise due to faults, frauds and misuse by the banks.
Today bank employees are very well paid with high salaries and perks. They, and particularly the senior officials of the banks, should be made wholly responsible as well as accountable, so that misuse of depositor’s funds don’t take place and if so happened must be dealt severely.
It’s high time that the central government uplifts the confidence of depositors about the safe working of all financial institutions and providing complete assurance that their money lying with banks and other financial institutions is safe and will full refund from Deposit Insurance and Credit Guarantee Corporation (DICGC) in case of any unfortunate mishap or scam or bank closure.
Our elected representatives, particularly the MPs, should impress upon the government to give serious attention to this issue and come up with a legislation of providing adequate insurance cover (Rs 5 lakhs has been proposed by the Finance Minister) while the Parliament is in Winter Session and take up this important issue of Deposit Insurance.
