How to Claim Your Money Safely Through the DICGC Claim Process?

The DICGC claim process helps depositors recover their money when a bank goes into liquidation. The Deposit Insurance and Credit Guarantee Corporation (DICGC) protects deposits up to ₹5 lakh, including interest if a bank shuts down or faces restrictions from the Reserve Bank of India (RBI). Understanding how DICGC works makes it easier for account holders to claim the insured amount without any confusion or delay.

What Is DICGC?

DICGC is a wholly owned subsidiary of the Reserve Bank of India, operating under the Ministry of Finance, Government of India. DICGC was set up on July 15, 1978, to provide insurance for deposits made with Indian banks. The DICGC claim process helps people recover their insured deposits safely.

The maximum amount a person can get back is ₹5 lakh per bank account. This limit was increased from ₹1 lakh to ₹5 lakh on February 4, 2020.

What Documents Are Required in the DICGC Claim Process?

In the case of a bank's liquidation or amalgamation/merger, the liquidator is required to submit specific documents to the Deposit Insurance and Credit Guarantee Corporation for the settlement of depositors' claims. These documents typically include:

• DICGC claim form in the official format, submitted separately for each claim
• Authenticated copies of KYC document/s of the claimant, which are certified by the Liquidator with his full name and signature along with the seal and date

Note that original documents or photographs of depositors/borrowers should not be included with the claims. The DICGC retains the right to request any further documentation if needed to process the claim.

What Is the DICGC Claim Process?

Here is how the DICGC claim process works, in accordance with Section 17(1) of the DICGC Act, 1961:

1. Preparing Claim List

When a bank is closed, a liquidator is appointed to handle claims. The liquidator creates a list of depositors and their account details. This list must be sent to DICGC within 3 months.

1. Checking and Payment

DICGC carefully checks the claim list to ensure all details are correct. If a bank has enough funds, it pays depositors directly. If not, DICGC pays up to ₹5 lakh per depositor.

1. Distributing the Money

A liquidator gives the money to depositors based on verified claims. If any money is left after distribution, the bank is legally obligated to return it to DICGC.

1. Claim Willingness Form

Depositors must fill up a claim willingness form and submit it to their bank to receive their payment.

1. Insurance Coverage

DICGC insures deposits up to ₹5 lakh, including interest. Deposits in different branches of the same bank are added together.

How Long is the DICGC Claim Settlement Time?

As per Section 18A of the DICGC Act, 1961, banks are required to submit the list of depositors within 45 days from the date the AID (Administrator's Intervention Directions) is imposed. 

The DICGC will verify the authenticity of the claims made by the bank within 30 days of receiving the claims and will make payments to the depositors within 15 days after completing the verification process. However, the total time from the imposition of AID to the payment to depositors should not exceed 90 days. 

Depositors can submit their willingness forms to the bank at any time, for the bank to proceed with the DICGC claim process, provided the bank is under AID when the willingness form is submitted by the depositor.

If you want to track the DICGC claim process, you can check the DICGC claim status through your bank.

The Most Recent Claim Settlement Status

Recently, two banks, Lucknow Urban Co-operative Bank Ltd in Uttar Pradesh and Laxmi CBL in Maharashtra, went through the DICGC claim process after they closed.

The DICGC actively settled Lucknow Urban Co-operative Bank’s claim on May 14, 2024, and paid ₹9.48 crore to 3,169 depositors.

Similarly, DICGC settled Laxmi CBL’s claim on August 29, 2024, by paying 16,259 depositors a total of ₹4.42 crore.

If a bank faces financial difficulties and is unable to pay depositors, DICGC steps in to insure your savings! 

Final Word

The DICGC claim process ensures depositors do not lose their savings if a bank goes through liquidation. The corporation works with banks and liquidators to process claims quickly. By submitting the necessary documents promptly, banks can ensure that depositors receive their funds without delay.

Read More About DICGC:
What is DICGC Insurance & Limit
RBI’s Role in Strengthening DICGC Insurance in FD for Investor’s Safety
A Complete Guide to DICGC Insured Banks List & Deposit Protection
Know All About the Deposit Insurance System in India
Benefits of Raising Deposit Insurance Limits in the Light of the Recent Incident