Deposit Insurance and Credit Guarantee Corporation, (DICGC) DICGC, located at Mumbai is a subsidiary of Reserve Bank of India. DICGC provides insurance on deposit to bank with various terms and conditions. Commercial banks and cooperative banks are insured by the DICGC. Primary cooperative societies are not insured by DICGC. The functions of the DICGC are governed under the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (DICGC act) and The Deposit Insurance and Credit Guarantee Corporation General Regulations, 1961. These regulations have been framed by the Reserve Bank of India in exercise of the powers conferred by subsection (3) of section 50 of the said act. The Preamble of the DICGC Act, 1961 states that it is an act to provide for the establishment of a corporation for the purpose of insurance of deposits and guarantee of credit facilities and for other matters connected therewith or incidental thereto. At present, deposit insurance cover is compulsory for the commercial banks, the RRBs and the co-operative banks. DICGC The authorized capital of the corporation is Rs. 50 crore, which is fully issued by the Reserve Bank of India (RBI). The corporation is headed by Chairman who is Deputy Governor of Reserve Bank of India. Insurance Cover: Banks can get insurance cover on all deposit like saving, fixed, current and recurring, etc. Since 1993 insurance is provided up to an amount of rupees 1.00 lakh for both principal and interest amount. Premium: Deposit insurance premium is borne entirely by the insured bank. At present, the deposit insurance premium is charged (on advance basis) on a half-yearly basis based on deposit balances as on end-June and end-December basis. The premium for half years ending June and December is required to be remitted by July-/January-end respectively. Banks would be given a period of one month's time to pay the advance premium amount, as is the present practice. The premium payable by banks to the corporation is 10 paisa for rupees 100. The premium is payable by the bank in two installments that is 5 paisa for rupees 100 each by not later than last working day of May and November each year. In case the last working day being a holiday, the preceding day is considered last working day. The premium is paid in advance that is if the bank is paying premium by May 2017, it covers deposit from 1st April 2017 to 30th September 2017. The Corporation has the power to cancel the registration of an insured bank if it fails to pay the premium for three consecutive half-year periods Return: The banks are required to submit DI return within one month of the half year. If the insured bank fails to furnish DI-Returns within the above prescribed time limit, it shall be punishable with fine up to Rs. 2,000 for each such offence and additional fine up to Rupees 100 per day during which the failure continues after conviction for the first search failure. Settlement of Claim: In case a bank is liquidated or wound up, every depositor of the bank registered with the DICGC will get payment equal to his deposit held by him in the same right and same capacity in all the branches of that bank put together. However this will be subject to maximum limit of rupees one lakh only. This amount will be calculated as outstanding on the date of cancellation of registration that is date of cancellation of license or order for winding up of the bank or liquidation. Now say a bank fails and a scheme of amalgamation, merger takes place where the depositor’s complete deposits are not fully protected. In such case the DICGC will pay the difference between the full amount of deposit or the limit of insurance cover in force at that time, whichever is less, and the amount actually received by him under the scheme.