The Deposit Insurance and Credit Guarantee Corporation Act, 1961

The Deposit Insurance and Credit Guarantee Corporation Act, 1961 establishes the Deposit Insurance and Credit Guarantee Corporation (DICGC) to provide insurance cover to depositors in case of bank failures. The Act mandates all commercial and co-operative banks to become members of the DICGC and pay an insurance premium for deposit insurance. In case of a bank failure, the DICGC ensures that depositors get back their insured deposits up to a limit of Rs. 5 lakhs per depositor per bank. The Act also empowers the DICGC to take over the management of a failing bank and to initiate liquidation proceedings if necessary.