What’s deposit insurance coverage?

Deposit insurance coverage is a canopy that deposit holders of a financial institution get when their financial institution defaults, goes into liquidation or is unable to pay to its depositors. In India, deposit insurance coverage is secured by the Deposit Insurance and Credit Guarantee Corporation (DICGC). In case when a financial institution collapses and is unable to pay to its depositors, DICGC steps in and covers losses as much as Rs 5 lakhs. The depositor insurance coverage contains all of the sorts of deposits a lender gives, viz. financial savings, fastened, recurring and present. In India, all operational banks besides major cooperative banks are compulsorily enrolled within the depositor insurance coverage scheme underneath DICGC.