The fall of two major US banks, the Silicon Valley Bank and the Signature Bank, back-to-back has led to fear among their customers about their hard-earned money. It has also been reported that some companies in India may have suffered due to the fall of Silicon Valley Bank. However, US President Joe Biden has made an effort to ease concerns by reassuring people that their money was secure. Even the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), guaranteed in a combined declaration that taxpayers would not incur any losses as a result of Silicon Valley Bank’s bankruptcy. But do you know what happens when a bank collapses in India? If not, then read further.

For accounts made with registered banks, the RBI’s affiliate DICGC (Deposit Insurance and Credit Guarantee Corporation) provides insurance coverage. The insurance programme provides up to Rs 5,00,000 per bank to depositors in the event of bank failure for accumulated bank deposits, which include permanent deposits, savings accounts, recurring deposits and current accounts. Here, the DICGC policy insures both the interest and the primary components.

All accounts, including savings, fixed, current, recurrent, etc., are insured by the DICGC, except the following kinds of assets:

-Foreign government deposits

-Central and state government deposits

-Interbank remittances

-State Land Development Bank deposits with the State Cooperative Bank

Any sum owing as a result of a payment made outside of India

-Any sum that has been expressly exempted by the company from the Reserve Bank of India’s prior sanction

How can you tell if your bank is covered by the DICGC?

While designating the banks as insured banks, the DICGC also provides them with printed flyers outlining the security the corporation offers to their customers. The deposit insurance coverage is applied individually to the deposits in each bank if an individual has deposits with more than one bank.

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