Data Focus

98% of bank accounts are fully protected with deposit insurance

Surabhi Mumbai | Updated on July 23, 2021

The DICGC Bill, to be tabled soon, insures deposits of upto ₹5 lakh in each account with banks


With the government slated to table the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill, 2021 in Parliament in the ongoing Monsoon session, data show that 98.1 per cent of the total number of deposit accounts are fully protected.

Claim settlement time is also much faster compared to 2018-19, but it can be improved further.

The DICGC scheme is aimed at customer protection and insures deposits of upto ₹5 lakh in each account with banks.

According to data with the Reserve Bank of India, insured deposits of banks amounted to ₹76,21,258 crore as on end-March 2021 constituting 50.9 per cent of total assessable deposits at ₹1,49,67,776 crore.

This is approximately at the same level as 2019-20, when the total amount of assessable deposits was ₹1,34,88,900 crore, of which 50.9 per cent were protected. In terms of fully protected accounts, 98.3 per cent of the 2,35,000 bank accounts as on March 31, 2020 were protected, data with the Deposit Insurance and Credit Guarantee Corporation reveals.

Deposit insurance

The government had in February 2020 raised the limit of insurance cover for depositors in insured banks from ₹1 lakh to ₹5 lakh per depositor, which meant that a lot more of the savings of account holders were protected. With the ₹1 lakh cap, just 92 per cent of the accounts were fully protected and 27.4 per cent of the assessable deposits were covered.

The new Bill, announced by Finance Minister Nirmala Sitharaman in the Budget 2021-22, aims to enable easy and time-bound access for depositors to their hard-earned money. This would allow depositors to access their savings through deposit insurance in a time-bound manner in case there is suspension of banking business of the insured bank.

According to the annual report of the DICGC, it took an average 508 days between de-registration of a bank and claim settlement in 2019-20 as against 1,425 days in 2018-19.

However, it took 11 days between receipt of a claim at DICGC and claim settlement in both these years.

Claims processed

The RBI’s Financial Stability Report for July 2021 reveals that the DICGC processed claims amounting to ₹993 crore during 2020-21, with a view to ensuring payment to insured depositors of liquidated banks under the prevailing pandemic situation.

“Of this, ₹564 crore pertained to nine co-operative banks,” the FSR said.

The coverage available to depositors of scheduled commercial banks and urban cooperative banks stood at 49.6 per cent and 69.4 per cent, respectively.

During April 2021, ₹330 crore was settled in case of one cooperative bank.


Published on July 23, 2021

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