Deposit insurance is a cover that deposit holders of a bank get when their bank defaults, goes into liquidation or is unable to pay to its depositors. In India, deposit insurance is secured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). In case when a bank collapses and is unable to pay to its depositors, DICGC steps in and covers losses up to Rs 5 lakhs. The depositor insurance includes all the types of deposits a lender offers, viz. savings, fixed, recurring and current. In India, all operational banks except primary cooperative banks are compulsorily enrolled in the depositor insurance scheme under DICGC.
