Question
Consider the following statements regarding the insurance cover provided to depositors by Deposit Insurance and Credit Guarantee Corporation (DICGC)
Select the correct answer using the code given below:
- All commercial banks and urban cooperative banks have to register with DICGC for providing insurance to depositors
- RBI incurs the insurance premium burden
- Government incurs the insurance premium burden
Select the correct answer using the code given below:
Answer: Option C
Answer: (c)
As per "The Deposit Insurance and Credit Guarantee Corporation (DICGC) Act 1961", DICGC must register all commercial banks (scheduled and non-scheduled both) and Urban Cooperative Banks (UCB) and State and District Central Cooperative Banks (StCB/DCCB) as an insured bank. (StCB/DCCB are rural cooperative banks)
And every insured bank is liable to pay a premium to DICGC as may be notified by DICGC after the approval of RBI. But the premium shall not exceed fifteen paise per annum for every hundred rupees of the total amount of the deposits in that bank.
This means the premium has been capped under the DICGC Act. As per the rules, the premium cost is required to be borne by the bank themselves and cannot be passed on to depositors.
Since the insurance cover has been increased from the present Rs. 1 lakh per depositor per bank to Rs. 5 lakh per depositor per bank, the insurance premium has also been increased from presently 10 paise per Rs. 100 of deposit to 12 paise per Rs. 100 of deposit.
Deposits of foreign governments, deposits of central and state governments, and interbank deposits are not covered/insured.
Was this answer helpful ?
Answer: (c)
As per "The Deposit Insurance and Credit Guarantee Corporation (DICGC) Act 1961", DICGC must register all commercial banks (scheduled and non-scheduled both) and Urban Cooperative Banks (UCB) and State and District Central Cooperative Banks (StCB/DCCB) as an insured bank. (StCB/DCCB are rural cooperative banks)
And every insured bank is liable to pay a premium to DICGC as may be notified by DICGC after the approval of RBI. But the premium shall not exceed fifteen paise per annum for every hundred rupees of the total amount of the deposits in that bank.
This means the premium has been capped under the DICGC Act. As per the rules, the premium cost is required to be borne by the bank themselves and cannot be passed on to depositors.
Since the insurance cover has been increased from the present Rs. 1 lakh per depositor per bank to Rs. 5 lakh per depositor per bank, the insurance premium has also been increased from presently 10 paise per Rs. 100 of deposit to 12 paise per Rs. 100 of deposit.
Deposits of foreign governments, deposits of central and state governments, and interbank deposits are not covered/insured.
Was this answer helpful ?
More Questions on This Topic :
Latest Videos
Latest Test Papers
Submit Solution