The RBI’s subsidiary, Deposit Insurance and Credit Guarantee Corporation, offers an insurance cover of up to Rs 5 lakh for retail depositors of failed banks.
Use Daava Soochak to track your deposit insurance claims online
Individuals and risk-averse investors, who park their life-savings in deposits, often place utmost faith in the oft-quoted phrase “as safe as a bank”.
Yet, it is a fact that several banks, including large commercial, mid-sized private and co-operative banking instituitions, often go bust, leaving such depositors, many of whom are senior citizens, in a lurch. The Reserve Bank of India (RBI’s) subsidiary Deposit Insurance and Credit Guarantee Corporation (DICGC) offers an insurance cover of up to Rs 5 lakh for retail depositors of failed banks.
In August, the DICGC rolled out an online facility known as Daava Soochak for retail depositors to track such claims. Here’s how you can use the tool to access your bank deposit insurance claim status:
Protection of small depositors’ interests
Deposits with all banks, including failed banks and those under moratorium imposed by the RBI that are yet to be liquidated, are insured to the extent of Rs 5 lakh, covering both principal and interest.
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As per the Deposit Insurance and Credit Guarantee Corporation Act, 1967 (amended in 2021), such depositors are entitled to receive their claims within 90 days. Prior to this amendment, depositors could gain access to the insurance cover only if their banks went into liquidation. They had to wait endlessly for the RBI to decide if the bank needed to go for liquidation or not.
Daava Soochak for ease of tracking
And such depositors who wish to ascertain the status of such claims can monitor the progress instantly through the Daava Soochak claim tracker.
You will have to visit the DICGC website (www.dicgc.org.in) and locate the tracker displayed prominently on the homepage (https://dicgc.org.in/claimstatus/Depositer/Checkclaimstatus). Then select the bank from the dropdown menu and key in your mobile number to know the status. “To begin with, depositors can view the status of their claims for banks placed under All Inclusive Directions (AID) post April 01, 2024,” stated the press release issued by DICGC.
The “All Inclusive Directions” refer to restrictions imposed by the RBI on certain operations of banks. At present, the dropdown menu displays the names of six co-operative banks such as National Urban Co-operative Bank Ltd (Pratapgarh), Sarvodaya Co-operative Bank, Amanath Co-operative Bank, Konark Urban Co-operative Bank and Shirpur Merchants’ Co-operative Bank.
Also read: How Budget 2021 simplified the process of accessing deposit insurance cover
All retail deposits covered
As per the DICGC Act, all types of retail deposits such as savings, fixed, current, and recurring are covered under this insurance scheme. The ones that are not covered include deposits of foreign governments, Central or state governments, inter-bank deposits, any deposit received outside India and so on. Banks that are covered under this scheme include commercial and co-operative banks, but not primary co-operative societies.
The deposit insurance scheme is mandatory for banks. It’s not the depositors, but the banks which also have to pay the insurance premiums to DICGC.
Optimising deposit insurance covers
If you have deposits with multiple banks, the insurance cover limit is applied separately to the deposits in each bank. So, diversifying deposits across banks is one way to optimise insurance cover. Alternatively, you can maintain joint accounts in the same bank but in a manner where the names of the accountholders are not in the same order.
Likewise, in the case of different ownership statuses. For instance, if you maintain deposit accounts as a guardian of a minor, partner of a firm or director of the company and so on, the cover limit will apply separately.