Which Banks Are Not Covered Under DICGC: A Detailed Guide 

The Deposit Insurance and Credit Guarantee Corporation (DICGC) is a subsidiary of the Reserve Bank of India (RBI) that provides insurance for bank deposits and guarantees credit facilities. However, it does not provide coverage for all banks. Banks that are not registered under DICGC include primary cooperative banks and newly established banks. Additionally, deposits mobilised by Non-Banking Financial Companies (NBFCs) and Land Development Banks are also not covered. 

Therefore, it is advisable to be aware of which banks are not covered under DICGC before depositing money and ensure their savings are protected. It is important to ask the bank staff or check for a certificate confirming DICGC coverage. This step ensures that depositors' funds remain secure in case the bank faces any financial difficulties or closes unexpectedly.

All About DICGC

DICGC is a wholly owned subsidiary of the Reserve Bank of India. It protects depositors by insuring their savings in banks. If a bank fails, DICGC compensates depositors up to ₹5 lakh, including interest. DICGC raised this limit from ₹1 lakh to ₹5 lakh in 2020 to provide better security.

The formation of DICGC took place on July 15, 1978, when the Deposit Insurance Corporation and the Credit Guarantee Corporation of India merged.

The list of banks covered under DICGC covers almost all commercial and cooperative banks, but not all financial institutions. Banks must register with DICGC to offer this protection. Investors can check with their bank to confirm coverage, ensuring their deposits are secure in case of financial difficulties.

What Is the Difference Between Non-Insured Banks and Deregistered Banks?

A non-insured bank is a bank that was never covered by DICGC. This means if the bank fails, its customers will not get any money from the corporation. Examples include primary cooperative societies and NBFCs.

A de-registered bank, on the other hand, was once covered by DICGC but has lost its insurance status. The DICGC's liability in the case of a de-registered bank is limited to the extent of the deposits as of the date the bank's registration was cancelled. This can happen if the bank is prohibited from receiving fresh deposits, its license is cancelled or it is determined that the license cannot be granted. 

However, in the case of banks de-registered for other reasons, such as non-payment of premiums or ceasing to qualify as eligible cooperative banks, the DICGC has no liability to insure the bank customers.

Which Banks Are Not Covered Under DICGC?

A common question that depositors think of is ‘Which banks are not covered under DICGC’? Here is a list of non-insured banks and financial institutions:

1. Banks Not Covered by DICGC: Primary cooperative banks
2. Non-Bank Entities Not Covered: Non-Banking Financial Companies (NBFCs), Salary Earners' Societies, Some Co-operative Credit Societies
3. Deposits Not Covered: Money from foreign governments, deposits from Indian central or state governments, inter-bank deposits, deposits made outside India, deposits over ₹5 lakh
4. Other Investments Not Covered: Mutual funds, stocks, bonds, ETFs or cryptocurrencies

What Are the Reasons for a Bank to Deregister?

A bank can get deregistered under DICGC for the following reasons:

• Not Paying Fees: The Corporation has the authority to revoke the registration of an insured bank if it fails to pay the premium for 3 consecutive terms.
• License Cancelled: The registration of an insured bank is cancelled if the bank is prohibited from accepting new deposits.
• Bank Closes: If the bank shuts down, either by choice or by order
• Bank Merger: In the event of bank reconstruction/merger/amalgamation 

List of Deregistered Banks

Here is a list of de-registered banks to help you understand which banks are not covered under DICGC:

These are just a few de-registered banks. You can visit the official website to find out the entire list of de-registered banks.

Final Word

Starting from September 1, 2023, the DICGC directed all insured banks to prominently display the DICGC logo and QR code on their websites. This initiative allows customers to easily verify which banks are not covered under DICGC before making any deposits. By doing so, depositors can make informed decisions and choose a secure bank, helping them avoid potential risks.

Read More About DICGC:
What is DICGC Insurance & Limit
RBI’s Role in Strengthening DICGC Insurance in FD for Investor’s Safety
How to Claim Your Money Safely Through the DICGC Claim Process?
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