🛡️ What Happens If Your Bank Fails? DICGC Ensures Safety Up to ₹5 Lakh – Dhan Shiksha

 Is your hard-earned money in the bank truly safe?

What if your bank suddenly shuts down or collapses?

That’s where DICGC (Deposit Insurance and Credit Guarantee Corporation) steps in — an institution designed to protect depositors like you.

Let’s break it down in simple terms.

💡 What is DICGC?

DICGC is a wholly-owned subsidiary of the Reserve Bank of India (RBI). Its main function is to insure bank deposits, so that in case a bank fails, customers don't lose their savings.

✅ What Does DICGC Cover?

DICGC insures up to ₹5 lakh per depositor per bank, covering:

• 🏦 Savings accounts

• 📆 Fixed deposits

• 🔄 Recurring deposits

• 💼 Current accounts

🔸 The ₹5 lakh limit includes both principal and interest.

📌 Note: This limit applies per bank, not per account. So even if you have multiple accounts in the same bank, the total insurance is still capped at ₹5 lakh.

🚫 What DICGC Does Not Cover:

• Deposits of foreign governments or central/state governments

• Inter-bank deposits (bank to bank)

• Deposits kept outside India

• Certain obligations of cooperative banks

🔍 Real-Life Example: PMC Bank Crisis (2019)

In 2019, PMC Bank, a major cooperative bank, collapsed due to a massive loan fraud.

👉 Many customers had lakhs and crores of rupees stuck.
👉 Initially, RBI placed restrictions on withdrawals.
👉 But thanks to DICGC, each depositor received up to ₹5 lakh, even if their total deposit was much higher.

📅 As per updated rules, DICGC now pays eligible depositors within 90 days of a bank being declared under moratorium.

🔐 How to Fully Protect Your Money?

If you have more than ₹5 lakh in deposits, here’s how to stay safe:

1. 💳 Split your funds across multiple banks

2. 📈 Consider investing some portion in government-backed schemes or mutual funds

3. 🧐 Be cautious while depositing in small or cooperative banks – check their financial health

📌 Final Thoughts – Dhan Shiksha’s Advice

DICGC gives you basic protection up to ₹5 lakh, but for long-term financial security, smart money management is essential.

Never put all your eggs in one basket.
Remember — a wise investor always plans for both growth and safety.

👉 Stay tuned to Dhan Shiksha for more practical financial wisdom and insights that protect and grow your wealth.
Because where there is knowledge, there is prosperity. 💰📚