Deposit Insurance and Credit Guarantee Corporation Act 1961

For private circulation only
THE DEPOSIT INSURANCE AND CREDIT

GUARANTEE CORPORATION ACT, 1961
(As amended upto September 2006)
(47 of 1961)
&
GUARANTEE CORPORATION
GENERAL REGULATIONS, 1961
(As modified upto September 2006)

(47 of 1961)
(As amended upto September 2006)

ARRANGEMENT OF SECTIONS
CHAPTER I
PRELIMINARY
SECTIONS
1.
Short title extent and commencement
2.
Definitions
CHAPTER II
ESTABLISHMENT AND MANAGEMENT OF THE DEPOSIT INSURANCE
AND CREDIT GUARANTEE CORPORATION
3.
Establishment and Incorporation of Deposit Insurance Corporation
4.
Capital of Corporation
5.
Management of Corporation
6.
Board of Directors
7.
Meetings of Board
8.
Committees of Corporation
9.
Fees and Allowances of Directors
CHAPTER III
REGISTRATION OF BANKING COMPANIES AND CO-OPERATIVE BANKS AS
INSURED BANKS AND LIABILITY OF CORPORATION TO DEPOSITORS
10.
Registration of Existing Banking Companies
11.
Registration of New Banking Companies
11A. Registration of Regional Rural Banks
12.
Registration of Defunct Banking Companies
13.
Cancellation of Registration
10
13A. Registration of Co-operative Banks
10
13B. Registration of defunct Co-operative Banks
11
Arrangement of Sections
13C. Cancellation of Registration of Co-operative Banks
11
13D. Circumstances in which Reserve Bank may require winding up of

Co-operative Banks
12
14.
Intimation of Registration
13
15.
Premium
13
15A. Cancellation of registration of an insured bank for non-payment of premium
14
16.
Liability of Corporation in respect of insured deposits
14
17.
Manner of payment by Corporation in case of winding up of an insured bank
16
18.
Manner of payment by Corporation in case of scheme of compromise or

arrangement or of reconstruction or amalgamation in respect of an insured bank
16
19.
Discharge of the liability of Corporation
16
20.
Provision for unpaid amounts
17
21.
Repayment of the amount to the Corporation
17
CHAPTER III-A
CREDIT GUARANTEE FUNCTIONS
21A. Guaranteeing of credit facilities and indemnifying credit institutions
17
21B. Corporation to act as agent of Central Government
18
CHAPTER IV
FUNDS, ACCOUNTS AND AUDIT
22.
Funds of Corporation
18
23.
Deposit Insurance Fund
18
23A. Credit Guarantee Fund
19
24.
General Fund
19
25.
Investment
19
25A. Amount in one Fund may be transferred to the other Fund

or may be utilised for other purposes
20
26.
Advances by Reserve Bank
20
27.
Advances from General Fund to Deposit Insurance Fund or

Credit Guarantee Fund
20
ii
Arrangement of Sections
28.
Preparation of balance sheet, etc., by Corporation
20
29.
Audit
20
30.
Income-tax and Super-tax
21
31.
Reserve Fund
21
32.
Annual accounts and reports
22
CHAPTER V
MISCELLANEOUS
33.
Staff of Corporation
22
34.
Returns from insured banks
22
35.
Corporation to have access to records
22
36.
Inspection of insured banks by Reserve Bank
23
37.
Corporation to furnish information to Reserve Bank
23
38.
Reserve Bank to furnish information to Corporation
23
39.
Declaration of fidelity and secrecy
23
40.
Indemnity of Directors
24
41.
Defects in appointments not to invalidate acts, etc.
24
42.
Protection of action taken under this Act
24
43.
Companies Act, 1956 and Insurance Act, 1938 not to apply
24
44.
Liquidation of Corporation
24
45.
Powers of Central Government to give directions
25
46.
Dispute as to amount of premium
25
47.
Penalties
25
48.
Offences by companies
25
49.
Cognizance and trial of offences
26
50.
Regulations
26
51.
Amendment of certain enactments
27
THE FIRST SCHEDULE DECLARATION OF FIDELITY AND SECRECY
28
THE SECOND SCHEDULE AMENDMENT OF CERTAIN ENACTMENTS
28
iii
THE DEPOSIT INSURANCE AND CREDIT GUARANTEE

CORPORATION ACT, 1961
NO. 47 OF 1961
(7th December, 1961)
An act to provide for the establishment of a corporation for the purpose of insurance
of deposits and guaranteeing of credit facilities and for other matters connected therewith
or incidental thereto.
Be it enacted by Parliament in the Twelfth Year of the Republic of India
as follows :CHAPTER I
PRELIMINARY
1.
2.
(1)
This Act may be called the Deposit Insurance and Credit Guarantee
Corporation Act, 1961.
(2)
It extends to the whole of India.
(3)
It shall come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint.
Short title,
extent and
commencement
In this Act, unless the context otherwise requires, (a)
banking means the accepting, for the purpose of lending or investments,

of deposits of money from the public, repayable on demand or otherwise,
and withdrawable by cheque, draft, order or otherwise;
(b)
banking company means any company which transacts the business of

Banking in India and includes the State Bank, and a Subsidiary bank but
does not include the Tamilnadu Industrial Investment Corporation Ltd.;
Definitions
Explanation Any company which is engaged in the manufacture of goods or

carries on any trade and which accepts deposits of money from the public merely for
the purpose of financing its business as such manufacturer or trader shall not be deemed
to transact the business of banking within the meaning of this clause ;
(c)
Board means the Board of directors constituted under section 6;
(d)
company means any company as defined in section 3 of the companies

Act, 1956, and includes a foreign company within the meaning of section
591 of that Act;
1
1 of 1956
The Deposit Insurance and Credit Guarantee Corporation Act, 1961

(dd) co-coperative bank means a State Co-operative bank, a Central cooperative bank and a primary co-operative bank ;
(e)
5 of 1970
40 of 1980
Corporation means the Deposit Insurance and Credit Guarantee

Corporation established under Section 3;
(ee) corresponding new bank means a corresponding new bank

constituted under section 3 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970 or as the case may be,
under section 3 of the Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1980;
(eea) credit institution means all or any of the following, namely :
(i)
a banking company;
(ii)
a corresponding new bank;
(iii) a Regional Rural Bank;

(iv) a co-operative bank;
(v)
(f)
a financial institution;
defunct banking company means a banking company (i)
which has been prohibited from receiving fresh deposits; or
(ii)
which has been ordered to be wound up; or
(iii) which has transferred all its deposit liabilities in India to any other
institution; or
10 of 1949
(iv) which has ceased to be a banking company within the meaning of

sub-section (2) of section 36A of the Banking Regulation Act, 1949,
or has converted itself into a non-banking company; or
(v)
in respect of which a liquidator has been appointed in pursuance of a

resolution for the voluntary winding up of its affairs; or
(vi) in respect of which any scheme of compromise or arrangement or of

reconstruction has been sanctioned by any competent authority and
the said scheme does not permit the acceptance of fresh deposits; or
(vii) which has been granted a moratorium which is in operation; or
(viii) in respect of which an application for the winding up of its affairs is
pending in a competent court;
(ff) defunct co-operative bank means a co-operative bank
(i)
which has been prohibited from receiving fresh deposits; or

2

(ii)
which has been ordered or directed to be wound up; or
(iii) which has transferred all its deposit liabilities in India to any
other institution; or
(iv) which has ceased to be a co-operative bank within the meaning
of sub-section (2) of section 36A of the Banking Regulation
Act, 1949; or
(v)
10 of 1949
which has converted itself into a non-banking cooperative

society; or
(vi) in respect of which any scheme of compromise or arrangement

or of reconstruction has been sanctioned under any law for the
time being in force and such scheme does not permit the
acceptance of fresh deposits; or
(vii) which has been granted a moratorium which is in operation; or
(viii) in respect of which an application for winding up is pending
before the Registrar of Co-operative Societies or other competent
authority under any law relating to co-operative societies for
the time being in force in a State;
(g)
deposit means the aggregate of the unpaid balances due to a depositor

(other than a foreign Government, the Central Government, a State
Government, a corresponding new bank, Regional Rural Bank or a
banking company or a co-operative bank) in respect of all his accounts,
by whatever name called, with a corresponding new bank or with a
Regional Rural Bank or with a banking company or a co-operative
bank and includes. credit balances in any cash credit account but does
not include,
(i)
where a banking company or a corresponding new bank at the

commencement of this Act or where an eligible co-operative
bank at the commencement of the Deposit Insurance Corporation
(Amendment) Act,1968 is working under a scheme of
compromise or arrangement or of reconstruction sanctioned by
any competent authority providing for the acceptance of fresh
deposits, any amount due to the depositor in respect of his deposit
before the date of the coming into force of the scheme to the
extent it is not credited after the said date under the provisions
of that scheme; or
(ia) any amount due on account of any deposit with any insured bank
which has been specially exempted in this behalf by the
81 of 1985

Corporation with the previous approval of the Reserve Bank
or,
(ii)
any amount due on account of any deposit received outside India;
(gg) eligible co-operative bank means a co-operative bank the law for
the time being governing which provides that,
(i)
an order for the winding up, or an order sanctioning a scheme of

compromise or arrangement or of amalgamation or
reconstruction, of the bank may be made only with the previous
sanction in writing of the Reserve Bank;
(ii)
an order for the winding up of the bank shall be made if so

required by the Reserve Bank in the circumstances referred to
in section 13D;
(iii) if so required by the Reserve Bank in the public interest or for

preventing the affairs of the bank being conducted in a manner
detrimental to the interests of the depositors or for securing the
proper management of the bank, an order shall be made for the
supersession of the committee of management or other managing
body (by whatever name called) of the bank and the appointment
of an administrator therefore for such period or periods not
exceeding five years in the aggregate as may from time to time
be specified by the Reserve Bank;
(iv) an order for the winding up of the bank or an order sanctioning
a scheme of compromise or arrangement or of amalgamation or
reconstruction or an order for the supersession of the committee
of management or other managing body (by whatever name
called) of the bank and the appointment of an administrator
therefore made with the previous sanction in writing or on the
requisition of the Reserve Bank shall not be liable to be called
in question in any manner; and
(v)
(h)
10 of 1949
the liquidator or the insured bank or the transferee bank, as the

case may be, shall be under an obligation to repay the Corporation
in the circumstances, to the extent and in the manner referred to
in section 21;
existing banking company means a banking company carrying on

the business of banking at the commencement of this Act which either
holds a licence at such commencement under section 22 of the Banking
Regulation Act, 1949, or having applied for such licence has not been
informed by notice in writing by the Reserve Bank that a licence cannot
be granted to it and includes the State Bank and a subsidiary bank, but
does not include a defunct banking company;
4

(hh) existing co-operative bank means a co-operative bank carrying on
the business of banking at the commencement of the Deposit Insurance
Corporation (Amendment) Act, 1968, which either holds a licence at
such commencement under section 22 of the Banking Regulation Act,
1949, or having applied for such licence has not been informed by
notice in writing by the Reserve Bank that a licence cannot be granted
to it but does not include a defunct co-operative bank;
(hha) financial institution means any financial institution within the
meaning of clause (c) of section 45 I of the Reserve Bank of India
Act, 1934;
(i)
10 of 1949
2 of 1934
insured bank means a corresponding new bank or a banking company

or a Regional Rural Bank or an eligible co-operative bank for the time
being registered under the provisions of this Act and includes for the
purposes of sections 16, 17, 18 and 21, (i)
a banking company referred to in clause (a) or clause (b) of subsection (1) of section 13, or
(ia) a corresponding new bank to which the provisions of clause

(a) of sub-section (1) of section 13 apply, or
(ii)
a co-operative bank referred to in clause (a) or clause (b) of

section13C, the registration whereof has been cancelled under
section 13; or as the case may be, under section 13C;
(j)
insured deposit means the deposit or any portion thereof the

repayment whereof is insured by the Corporation under the provisions
of this Act;
(k)
new banking company means a banking company which begins to

transact the business of banking after the commencement of this Act
under a licence granted to it under section 22 of the Banking Regulation
Act, 1949,
(kk) new co-operative bank means a co-operative bank which begins to

transact the business of banking after the commencement of the
Deposit Insurance Corporation (Amendment) Act, 1968, under a
licence granted to it under section 22 of the Banking Regulation Act,
1949, and includes a primary credit society becoming a primary cooperative bank after such commencement;
(l)
premium means the sum payable by an insured bank under section

15 of this Act;
(m) prescribed means prescribed by regulations made under this Act ;

5
10 of 1949
10 of 1949

21 of 1976
(ma) Regional Rural Bank means a Regional Rural Bank established under
section 3 of the Regional Rural Banks Act, 1976;
2 of 1934
(n)
Reserve Bank means the Reserve Bank of India constituted under

the Reserve Bank of India Act, 1934;
23 of 1955
(o)
State Bank means the State Bank of India constituted under the
State Bank of India Act, 1955;
38 of 1959
(p)
subsidiary bank shall have the meaning assigned to it in section 2 of

the State Bank of India (Subsidiary Banks) Act, 1959;
24 of 2004
(q)
the expressions central co-operative bank and State Co-operative

Bank shall have the meanings, respectively, assigned to them in the
National Bank for Agriculture and Rural Development Act, 1981.
24 of 2004
(r)
the expressions co-operative society, primary co-operative bank

and primary credit society shall have the meanings respectively
assigned to them in Part V of the Banking Regulation Act, 1949.
CHAPTER II
ESTABLISHMENT AND MANAGEMENT OF THE

DEPOSIT INSURANCE CORPORATION
Establishment and
incorporation
of Deposit
Insurance
Corporation.
3.
(1)
The Central Government shall, by notification in the Official Gazette,

establish a Corporation by the name of the Deposit Insurance
Corporation which shall be a body corporate having perpetual
succession and a common seal with power, subject to the provisions
of this Act, to acquire, hold or dispose of property and to contract, and
may, by the said name, sue or be sued.
(lA) Any reference in this act to the Deposit Insurance Corporation shall,
on and from the date on which Chapter II of the Deposit Insurance
Corporation (Amendment and Miscellaneous Provisions) Act, 1978,
comes into force, be construed as a reference to the Deposit Insurance
and Credit Guarantee Corporation.
Capital of
Corporation
4.
(2)
The head office of the Corporation shall be at Mumbai, but it may,

with the previous sanction of the Reserve Bank, establish branches or
agencies in any other place in India.
(1)
The authorised capital of the Corporation shall be one crore of rupees

but the Central Government may, in consultation with the Reserve
Bank, increase such capital from time to time, so however, that the
total authorised capital shall not exceed fifty crores of rupees.
(2)
The issued capital for the time being of the Corporation shall be fully
paid-up and shall stand allotted to the Reserve Bank.
6

5.
The general superintendence, direction and the management of the affairs

and business of the Corporation shall vest in a Board of directors which
may exercise all powers and do all acts and things which may be exercised
or done by the Corporation.
Management of the
Corporation
6.
(1)
Board of
Directors
(2)
The Board of directors of the Corporation shall consist of the following,

namely :(a)
the Governor, for the time being, of the Reserve Bank or, if the
Reserve Bank, in pursuance of the decision of the committee of
the Central Board of Directors of that Bank, nominates any
Deputy Governor for the purpose, the Deputy Governor so
nominated, who shall be the Chairman of the Board;
(b)
a Deputy Governor or any other officer of the Reserve Bank

nominated by that bank;
(c)
an officer of the Central Government nominated by that

Government;
(d)
five directors nominated by the Central Government in

consultation with the Reserve Bank, three of whom shall be
persons having special knowledge of commercial banking,
insurance, commerce, industry or finance and two of whom shall
be persons having special knowledge of, or experience in, cooperative banking or co-operative movement, and none of
directors shall be an officer of Government or of the Reserve
Bank or an officer or other employee of the Corporation or a
director, an officer or other employee of a banking company or
a co-operative bank or otherwise actively connected with a
banking company or a co-operative bank.
(e)
four directors, nominated by the Central Government in

consultation with the Reserve Bank, having special knowledge
or practical experience in respect of accountancy, agriculture
and rural economy, banking, co-operation, economics, finance,
law or small scale industry or any other matter, the special
knowledge of, and practical experience in which, is likely in the
opinion of the Central Government, to be useful to the
Corporation.
(i)
A director nominated under clause (b) or clause (c) or clause (d)

or clause (e) of sub-section (1) shall hold office during the
pleasure of the authority nominating him; and
66 of
1988
(ii)
subject to the provisions contained in clause (i), a director

nominated under clause (d) or clause (e) of sub-section (1), shall
hold office for such period, not exceeding three years, as may
45 of
2006

be specified by the Central Government in this behalf and shall
be eligible for renomination;1
Provided that no such director shall hold office continuously for
a period exceeding six years.
(3)
(4)
(5)
Meetings
of Board
7.
1.
(1)
A person shall not be capable of being nominated as a director under clause

(d) or clause (e) of sub-section (1) if (a)
he has been removed or dismissed from the service of Government or

of a local authority or of a corporation or company in which not less
than fifty-one per cent of the paid-up share capital is held by
Government; or
(b)
he is or at any time has been adjudicated as insolvent or has suspended

payment of his debts or has compounded with his creditors; or .
(c)
he is of unsound mind and stands so declared by a competent court; or
(d)
he has been convicted of any offence which, in the opinion of the

Central Government, involves moral turpitude.
if a director nominated under clause (d) of sub-section (1) (a)
becomes subject to any of the disqualifications mentioned in clauses

(a) to (d) of sub-section (3); or
(b)
is absent without leave of the Board for more than three consecutive
meetings thereof; or
(c)
becomes a director or an officer or an employee of an insured bank or

is, in the opinion of the Central Government, otherwise actively
connected with such bank; or
(d)
becomes an officer or other employee of Government or of the Reserve

Bank or of the Corporation; his seat shall thereupon become vacant.
If a director nominated under clause (e) of sub-section (1) (a)
becomes subject to any of the disqualifications mentioned in clauses

(a) to (d) of sub-section (3); or
(b)
is absent without leave of the Board for more than three consecutive
meetings thereof; his seat shall thereupon become vacant.
The Board shall meet at such times and places and shall observe such rules
of procedure in regard to the transaction of business at its meetings as may
be prescribed.
Words and thereafter until his successor assumes office deleted by the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act, 2006. (45 of
2006)
8.
9.
(2)
The Chairman or, if for any reason he is unable to attend, the director
nominated under clause (b) of sub-section (1) of section 6 shall preside at
meetings of the Board and, in the event of equality of votes, shall have a
second or casting vote.
(1)
The Board may constitute an Executive Committee consisting of such

number of directors as may be prescribed.
(2)
The Executive Committee shall discharge such functions as may be

prescribed or may be delegated to it by the Board.
(3)
The Board may constitute such other committees, whether consisting wholly
of directors or wholly of other persons or partly of directors and partly of
other persons as it thinks fit for the purpose of discharging such of its
functions as may be prescribed or may be delegated to them by the Board.
(4)
A committee constituted under this section shall meet at such times and
places and shall observe such rules of procedure in regard to the transaction
of business at its meetings as may be prescribed.
(5)
The members of a committee (other than directors of the Board) shall be

paid by the Corporation such fees and allowances for attending its meetings
and for attending to any other work of the Corporation as may be prescribed.
The directors of the Board shall be paid by the Corporation such fees and
allowances for attending the meetings of the Board or of any of its committees
and for attending to any other work of the Corporation as may be prescribed.
Committees of
Corporation
Fees and
allowances
of directors
Provided that no fees shall be payable to the Chairman or to the director nominated
under clause (b) or clause (c) of sub-section (1) of section 6.
CHAPTER III
REGISTRATION OF BANKING COMPANIES AND CO-OPERATIVE BANKS AS

INSURED BANKS AND LIABILITY oF CORPORATION To DEPOSITORS
10 of 1949
10. The Corporation shall register every existing banking company as an insured
bank before the expiry of thirty days from the date of commencement of this Act.
Registration
of existing
banking
companies
11. The Corporation shall register every new banking company as an insured bank as
soon as may be after it is granted a licence under section 22 of the Banking
Regulation Act, 1949.
Registration
of new
banking
companies
11A.The Corporation shall register every Regional Rural Bank before the expiry of
thirty days from the date of its establishment.
Registration
of Regional
Rural Banks
12. Every banking company, being a defunct banking company at the commencement
of this Act, by reason of sub-clause (vii), or sub-clause (viii) of clause (f) of
9
Registration
of defunct
banking
companies

section 2 shall, unless it becomes a defunct banking being company under any
other sub-clause of that clause, be registered by the Corporation as an insured
bank as soon as may be after the termination of the order of moratorium or, as the
case may be, the rejection of the application for its winding up.
Cancellation
of
registration.
13. (1)
10 of 1949
10 of 1949
Registration
of cooperative
banks
The registration of a banking company as an insured bank shall stand

cancelled on the occurrence of any of the following events, namely:
(a)
if it has been prohibited from receiving fresh deposits; or
(b)
if it has been informed by notice in writing by the Reserve Bank that

its licence has been cancelled under section 22 of the Banking
Regulation Act,1949 or that a licence under that section cannot be
granted to it; or
(c)
if it has been ordered to be wound up; or
(d)
if it has transferred all its deposit liabilities in India to any other

institution; or
(e)
if it has ceased to be a banking company within the meaning, of sub

section (2) of section 36A of the Banking Regulation Act, 1949, or
has converted itself into a non-banking company; or
(f)
if a liquidator has been appointed in pursuance of a resolution for the

voluntary winding up of its affairs; or
(g)
if in respect of it any scheme of compromise or arrangement or of

reconstruction has been sanctioned by any competent authority and
the said scheme does not permit the acceptance of fresh deposits; or
(h)
if it has been amalgamated with any other banking institution.
(2)
The provisions of clauses (a), (c), (d) and (h) of subsection (1) shall apply to a corresponding new bank as they apply
to a banking company.
(3)
The provisions of clauses (a), (c), (d) and (h) of sub-section (1)
shall apply to a Regional Rural Bank as they apply to a banking
company.
13A.(1)
No co-operative bank shall be registered under this section unless it is an

eligible co-operative bank.
(2)
Subject as aforesaid (a)
the Corporation shall register every existing co-operative bank as an

insured bank before the expiry of thirty days next following the
commencement of the Deposit Insurance Corporation (Amendment)
Act, 1968;
10

(b)
the Corporation shall register as an insured bank :

(i)
(ii)
every new co-operative bank (other than a primary credit society

becoming a primary co-operative bank after the commencement
of the Deposit Insurance Corporation (Amendment) Act, 1968
as soon as may be after it is granted a licence under section 22
of the Banking Regulation Act, 1949;
10 of 1949
a primary credit society becoming a primary co-operative bank

after such commencement within three months of its having
made an application for a licence under the said section;
(iii) every co-operative bank which has come into existence after
the commencement of the Deposit Insurance Corporation
(Amendment) Act, 1968, as a result of the division of any other
co-operative society carrying on business as a co-operative bank,
or the amalgamation of two or more co-operative societies
carrying on banking business, at the commencement of the
Banking Laws (Application to Co-operative Societies) Act, 1965,
or at any time thereafter, within three months of its having made
an application for a licence under the said section:
56 of 1968
23 of 1965
Provided that a bank referred to in clause (b) shall not be so

registered if it has been informed by notice in writing by the
Reserve Bank that such a licence cannot be granted to it.
13B. Every co-operative bank, being a defunct co-operative bank at the
commencement of the Deposit Insurance Corporation (Amendment) Act, 1968
by reason of sub-clause (vii) or sub-clause (viii) of clause (ff) of section 2 shall,
unless it becomes a defunct co-operative bank under any other sub-clause of that
clause, be registered by the Corporation as an insured bank as soon as may be
after the termination of the order of moratorium, or as the case may be, the rejection
or dismissal of the application for its winding up provided it is an eligible cooperative bank and it either holds a licence granted under section 22 of the Banking
Regulation Act, 1949, or having applied for such licence in accordance with that
section, has not been informed by notice in writing by the Reserve Bank that a
licence cannot be granted to it.
Registration
of defunct
co-operative
banks
13C. The registration of a co-operative bank as an insured bank shall stand cancelled
on the occurrence of any of the following events, registration of namely :-
Cancellation of
registration of
co-operative
banks
(a)
if it has been prohibited from accepting fresh deposits; or
(b)
if it has been informed by notice in writing by the Reserve

Bank that its licence has been cancelled under section 22 of the
Banking Regulation Act, 1949, or a license under that section
cannot be granted to it, or
11
10 of 1949
10 of 1949
10 of 1949
Circumstances
in which
Reserve
Bank may
require
winding up
of cooperative banks
(c)
if it has been ordered or directed to be wound up; or
(d)
if it has transferred all its deposit liabilities in India to any other institution;
or
(e)
if it has ceased to be a co-operative bank within the meaning of sub-section

(2) of section 36A of the Banking Regulation Act, 1949; or
(f)
if it has converted itself into a non-banking co-operative society; or
(g)
if in respect of it any scheme of compromise or arrangement or of

reconstruction has been sanctioned by a competent authority and the said
scheme does not permit the acceptance by it of fresh deposits; or
(h)
if it has been amalgamated with any other co-operative society; or
(i)
if it ceases to be an eligible co-operative bank, that is, if the law for the time
being governing such co-operative bank does not provide for all or any of
the matters referred to in clause (gg) of section 2.
13D.(1)
The circumstances referred to in sub-clause (ii) of clause (gg) of section 2

(being circumstances in which the Reserve Bank may require the winding
up of a co-operative bank) are the following, namely:(a)
that the co-operative bank has failed to comply with the requirements
specified in section 11 of the Banking Regulation Act, 1949; or
(b)
that the co-operative bank has by reason of the provisions of section

22 of the said Act become disentitled to carry on banking business in
India; or
2 of 1934
(c)
that the co-operative bank has been prohibited from receiving fresh
deposits by an order under sub-section (4) of section 35 of the said
Act or under clause (b) of sub-section (3A) of section 42 of the Reserve
Bank of India Act, 1934; or
10 of 1949
(d)
that the co-operative bank having failed to comply with any

requirement of the Banking Regulation Act, 1949, other than
the requirements laid down in section 11 thereof, has
continued such failure, or having contravened any provision
of that Act has continued such contravention beyond such
period or periods as may be specified in that behalf by the
Reserve Bank from time to time, after notice in writing of
such failure or contravention has been conveyed to the co-operative
bank; or
(e)
that the co-operative bank is unable to pay its debts; or
(f)
that in the opinion of the Reserve Bank, (i)
a compromise or arrangement sanctioned by a competent

12

authority in respect of the co-operative bank cannot be worked
satisfactorily with or without modifications; or
(ii)
(2)
the continuance of the co-operative bank is prejudicial to the

interests of its depositors.
Without prejudice to the provisions of any other law for the time being in
force, a co-operative bank shall, for the purpose of clause (e) of sub-section
(1), be deemed to be unable to pay its debts .
(i)
(ii)
if on the basis of the returns, statements or information furnished to

the Reserve Bank under or in pursuance of the provisions of the
Banking Regulation Act, 1949, the Reserve Bank is of opinion that
the co-operative bank is unable to pay its debts; or
if the co-operative bank has refused to meet any lawful demand made
at any of its offices or branches within two working days, if such
demand is made at a place where there is an office, branch or agency
of the Reserve Bank; or within five working days if such demand is
made elsewhere and, in either case, the Reserve Bank certifies in
writing that the co-operative bank is unable to pay its debts.
14. (1)
Where the Corporation has registered any banking company, Regional Rural
Bank or co-operative bank as an insured bank, it shall, within thirty days of
its registration, send an intimation in writing to the banking company,
Regional Rural Bank or co-operative bank that it has been registered as an
insured bank.
(2)
Every such intimation shall indicate the manner in which the premium
payable by the bank under section 15 may be calculated.
15. (1)
Every insured bank shall, so long as it continues to be registered, be liable

to pay a premium to the Corporation on its deposits at such rate or rates as
may, with the previous approval of the Reserve Bank, be notified by the
Corporation, from time to time, to the insured banks and different rates
may be notified for different categories of insured banks.2
Provided that the premium payable by any insured bank for any period
shall not exceed fifteen paise per annum for every hundred rupees of the
total amount of the deposits in that bank at the end of that period or, where
its registration has been cancelled during that period, on the date of its
cancellation.
Provided further that where the registration of any insured bank is cancelled
under section 13, or under section 13C such cancellation shall not affect the
2.
10 of 1949
Initially, rate of premium was fixed at 5 paise per annum for every hundred rupees of total amount of
deposit. The rate was reduced to 4 paise w.e.f. 1-10-1971, again increased to 5 paise and further to 8
paise w.e.f. 1-4-2004 and to 10 paise w.e.f. 1-4-2005.
13
Intimation of
registration
Premium

liability of that bank for payment of premium for the period before such
cancellation and of any interest due under the provisions of this section.
(2)
The premium shall be payable for such periods, at such times and in such
manner as may be prescribed.3
(3)
If an insured bank makes any default in payment of any amount of premium,

it shall, for the period of such default, be liable to pay to the Corporation
interest on such amount at such rate not exceeding eight per cent over and
above the bank rate, as may be prescribed.4
15 A.(1)
The Corporation may cancel the registration of an insured bank if it fails to

pay the premium for three consecutive periods :
Provided that no such registration shall be cancelled except after giving to
the concerned bank one months notice in writing calling upon that bank to
pay the amount in default.
(2)
Cancellation
of registration
of an insured
bank for nonpayment of
premium.
Liability of
Corporation
in respect
of insured
deposits.
The Corporation may restore the registration of a bank whose registration

has been cancelled under sub-section (1), if the concerned bank requests
the Corporation to restore the registration and pays all the amounts due by
way of premia from the date of default till the date of payment together
with interest due thereon, on the date of payment.
Provided that the Corporation shall not restore the registration unless it is
satisfied, on an inspection of the concerned bank or otherwise that it is
eligible to be registered as an insured bank.
16. (1)
Where an order for the winding up or liquidation of an insured bank is

made, the Corporation shall, subject to the other provisions of this Act, be
liable to pay to every depositor of that bank in accordance with the provisions
of section 17 an amount equal to the amount due to him in respect of his
deposit in that bank at the time when such order is made:
Provided that the liability of the Corporation in respect of an insured bank
referred to in clause (a) or clause (b) of sub-section (1) of section (13) or
clause (a) or clause (b) of section 13C shall be limited to the deposits as on
the date of the cancellation of the registration:
Provided further that the total amount payable by the Corporation to any
one depositor in respect of his deposit in that bank in the same capacity and
in the same right shall not exceed one thousand and five hundred rupees5.
3.
4.
5.
Time and manner of payment of premium mentioned under Section 15(2) prescribed under regulation
19 of DICGC General Regulations 1961.
Rate of penal interest mentioned under Section 15(3) fixed at 8 per cent above the Bank Rate vide
Regulation 20 of DICGC General Regulations 1961.
In exercise of power conferred under Second proviso to section 16 (1), the amount of Rs. 1,500 raised
to Rs. 5,000 w.e.f. January 1, 1968; Rs. 10,000 w.e.f. April 1, 1970; Rs. 20,000 w.e.f. January 1,
1976; Rs. 30,000 w.e.f. July 1, 1980; and Rs. 1,00,000 w.e.f. May 1, 1993.
14

Provided further that the Corporation may, from time to time, having regard
to its financial position and to the interest of the banking system of the
country as a whole, raise, with the previous approval of the Central
Government, the aforesaid limit of one thousand and five hundred rupees.
(2)
Where in respect of an insured bank a scheme of compromise or arrangement

or of reconstruction or amalgamation has been sanctioned by any competent
authority and the said scheme provides for each depositor being paid or
credited with, on the date on which the scheme comes into force, an amount
which is less than the original amount and also the specified amount, the
Corporation shall be liable to pay to every such depositor in accordance
with the provisions of section 18 an amount equivalent to the difference
between the amount so paid or credited and the original amount, or the
difference between the amount so paid or credited and the specified amount,
whichever is less :
Provided that where any such scheme also provides that any payment made
to a depositor before the coming into force of the scheme shall be reckoned
towards the payment due to him under that scheme, then the scheme shall
be deemed to have provided for that payment being made on the date of its
coming into force.
(3)
For the purposes of this section, the amount of a deposit shall be determined
after deducting therefrom any ascertained sum of money which the insured
bank may be legally entitled, to claim by way of set-off against the depositor
in the same capacity and in the same right.
(4)
In this section,
(a)
original amount in relation to a depositor means the total amount

due by the insured bank immediately before the date of coming into
force of the scheme of compromise or arrangement or, as the case
may be, of reconstruction or amalgamation to the depositor in respect
of his deposit in the bank in the same capacity and in the same right :
Provided that where under the proviso to sub-section (2), the scheme
is deemed to have provided for any payment being made on the date
of its coming into force, the amount of such payment shall be included
in calculating the original amount:
(b)
17. (1)
specified amount means one thousand and five hundred rupees, or

as the case may be, the amount fixed by the Corporation under the
third proviso to sub-section (1).
Where an insured bank has been ordered to be wound up or to be taken into

liquidation and a liquidator, by whatever name called, has been appointed
15

Manner of
payment by
Corporation
in case of
winding up of
an insured
bank.
in respect thereof, the liquidator shall, with the least possible delay and in
any case not later than three months from the date of his assuming charge of
office, furnish to the Corporation a list in such form and manner as may be
specified by the Corporation showing separately the deposits in respect of
each depositor and the amounts of set-off referred to in sub-section (3) of
section 16.
(2)
Manner of
payment by
Corporation
in case of
scheme of
compromise
or arrangement or of
reconstruction
or amalgamation in
respect of an
insured bank.
Discharge of
the liability of
Corporation
Before the expiry of two months from the receipt of such list from the
liquidator, the Corporation shall pay the amount payable under section 16
in respect of the deposit of each depositor:
(a)
directly to the depositor, or
(b)
to the depositor through such agency as the Corporation may

determine, or
(c)
to the liquidator.
(3)
Where the Corporation pays under sub-section (2), any amount in respect
of the deposit of a depositor to the liquidator, the liquidator shall pay or
cause to be paid that amount to the depositor and any expenses incurred by
the liquidator in making such payment shall be treated as expenses incurred
in the winding up of the insured bank.
18. (1)
Where a scheme of amalgamation of any insured bank with any other banking
institution (hereinafter referred to as the transferee bank) or a scheme of
compromise or arrangement or of reconstruction in respect of such bank
has been sanctioned and the Corporation has become liable to pay to
depositors of the insured bank under sub-section (2) of section 16, the
transferee bank where the scheme is of amalgamation and the insured bank
in any other case shall, with the least possible delay and in any case not
later than three months from the date on which such scheme, takes effect,
furnish to the Corporation a list in such form and manner as may be specified
by the Corporation and certified to be correct by the chief executive officer
of the transferee bank or, as the case may be, of the insured bank showing
separately deposits in respect of each depositor and the amounts of set off
referred to in sub-section (3) of section 16 and also the amounts paid or
credited or deemed to have been paid under the scheme.
(2)
Before the expiry of two months from the receipt of such list, the Corporation
shall pay the amount payable under section 16 either directly to the depositor
or to the transferee bank or the insured bank for being credited in his account.
19. Any amount paid by the Corporation under section 17 or section 18 in respect of
a deposit shall, to the extent of the amount paid, discharge the Corporation from
its liability in respect of that deposit.
16

20. Where any depositor to whom any payment is to be made in accordance with the
provisions of section 17 or section 18 cannot be found or is not readily traceable,
adequate provision shall be made by the Corporation for such payment and the
amount of such provision shall be accounted for separately in its books.
Provision for
unpaid
amounts.
21. (1)
Where any amount has been paid under section 17 or section 18 or any
provision therefor has been made under section 20, the Corporation shall
furnish to the liquidator or to the insured bank or to the transferee bank, as
the case may be, information as regards the amount so paid or provided for 6.
Repayment of
the amount to
Corporation6
(2)
On receipt of the information under sub-section (1), notwithstanding

anything to the contrary contained in any other law for the time being in
force, (a)
the liquidator shall, within such time and in such manner as may be
prescribed, repay to the Corporation out of the amount, if any payable
by him in respect of any deposit such sum or sums as make up the
amount paid or provided for by the Corporation in respect of that
deposit;
(b)
the insured bank or, as the case may be, the transferee bank, shall,
within such time and in such manner as may be prescribed, repay to
the Corporation out of the amount, if any, to be paid or credited in
respect of any deposit after the date of the coming into force of the
scheme referred to in section 18, such sum or sums as make up the
amount paid or provided for by the Corporation in respect of that
deposit.
CHAPTER III-A
CREDIT GUARANTEE FUNCTIONS

21.A(1)
The Corporation may guarantee credit facilities given by any credit institution
and may also indemnify credit institutions in respect of credit facilities
granted by them.
(2)
The Board may, for the purpose of guaranteeing credit facilities granted by
credit institutions, or indemnifying credit institutions, frame one or more
schemes in such form and in such manner and containing such provisions
as the Board may, from time to time, deem fit.
(3)
The Board may levy, on every credit institution availing itself of the
guarantees or indemnities provided by the Corporation, a fee at such rate or
6.
Time and manner of payment of the amount mentioned in Section 21 prescribed under Regulation 22
and 23 of DICGC General Regulations, 1961.
17
Guaranteeing
of credit
facilities and
indemnifying
credit
institutions

rates as may, with the previous approval of the Reserve Bank, be notified
by the Corporation to the credit institutions from time to time and different
rates may be notified for different categories of credit institutions, for
different types of credit facilities, for different areas where the credit facilities
are utilised, or for different categories of beneficiaries of the credit
facilities.
Explanation - Credit facility means any financial assistance, including a loan or
advance, cash credit, overdraft, bills purchased or discounted, a term or instalment
credit and any guarantee other than a performance guarantee, granted or issued in
India by a credit institution at any of its offices in India.
Corporation
to act as an
agent of
Central
Government
21B. The Corporation may act as agent for the Central Government (i)
in guaranteeing the due performance by any small-scale industrial concern

or other institution or undertaking or categories of institutions or undertakings
approved by the Central Government in this behalf, of its, or their obligations
to any credit institution in respect of loans and advances made or other
credit facilities provided to it, or them, by such credit institution, and
(ii)
in making, as such agent, of payments in connection with such

guarantee.
CHAPTER IV
FUNDS, ACCOUNTS AND AUDIT
Funds of
Corporation
22. The Corporation shall maintain three funds to be called respectively the Deposit
Insurance Fund, the Credit Guarantee Fund and the General Fund.
Deposit
Insurance
Fund
23. (1)
(2)
To the Deposit Insurance Fund shall be credited, (a)
all amounts received by the Corporation as premium;
(b)
all amounts received by the Corporation under section 21;
(c)
the amount advanced by the Reserve Bank under section 26;
(d)
all amounts transferred to that Fund from the General Fund or the
Credit Guarantee Fund under section 27; and
(e)
all income arising from the investments made out of that Fund.
The said Fund shall be applied

(a)
to make payments in respect of insured deposits;
(b)
to meet liability in respect of an advance taken under section 26;
(c)
to meet liability in respect of the amounts referred to in clause

18

(d)
23A.(1)
To the Credit Guarantee Fund shall be credited, (a)
(2)
of sub-section (1); and to meet the whole or any part of the liability on
account of the depreciation in assets, contributions to staff
superannuation and other funds or other expenses incurred or to be
incurred by the Corporation as may be decided by the Board.
all amounts in the Reserve for unexpired Guarantee Risks maintained

by the Credit Guarantee Corporation of India Limited, a company
formed and registered under the Companies Act, 1956, and having
its registered office at Mumbai;
(b)
all amounts received by the Corporation as fees for guarantees and

indemnities taken over or given by it;
(c)
all amounts received by the Corporation in respect of guarantees and

indemnities taken over or given by it;
(d)
all amounts transferred to that Fund from the Deposit Insurance Fund
or the General Fund under section 27; and
(e)
all income arising from the investments made out of that Fund.
Credit
Guarantee
Fund
1 of 1956
The said Fund shall be applied (a)
to make payments in respect of guarantees and indemnities taken over

or issued by the Corporation;
(b)
to meet any liability in respect of the amount referred to in clause (d)

of sub-section (1); and
(c)
to meet the whole or any part of the liability on account of depreciation

in assets, contributions to staff and superannuation and other funds,
or other expenses incurred or to be incurred by the Corporation, as
may be decided by the Board.
24. All receipts of the Corporation other than those referred to in sub-section (1) of
section 23 or in sub-section (1) of section 23A shall be credited to the General
Fund and all payments by the Corporation other than those referred to in subsection (2) of section 23, or, as the case may be, sub-section (2) of section 23(A)
shall be made out of that Fund.
General Fund
25. All moneys belonging to the Deposit Insurance Fund or the Credit Guarantee
Fund or the General Fund which may not for the time being be required by the
Corporation, shall be invested in promissory notes, stock or securities of the Central
Government and all other moneys shall be deposited with Reserve Bank.
Investment
19

Amount in
one Fund may
be transferred
to the other
Fund or may
be utilised for
other
purposes
25A.Notwithstanding anything contained in this Act, the Board may -
Advances by
Reserve Bank
(a)
transfer any amount from the Deposit Insurance Fund to Credit Guarantee
Fund or from the Credit Guarantee Fund to the Deposit Insurance Fund, or
(b)
utilise any money standing to the credit of either of the said Funds, for such
purposes as it may think fit, if it is satisfied that the balance in the Fund,
after such transfer or utilization, will be adequate to meet any probable
claim on that Fund.
26. (1)
The Reserve Bank shall, from time to time, advance to the Corporation on
a request by it such sum or sums as may be required by the Corporation for
the purposes of the Deposit Insurance Fund or the Credit Guarantee
Fund.
Provided that the total amount outstanding at any one time on account of
such advances shall not exceed five crores of rupees.
(2)
The terms and conditions of any advance under this section shall be such as
may be determined by the Reserve Bank with the approval of the Central
Government.
Advances from
General Fund
to the Deposit
Insurance
Fund or Credit
Guarantee
Fund
27. If, at any time, the amount available in the Deposit Insurance Fund or the Credit
Guarantee Fund is insufficient to meet the requirements of that Fund, the
Corporation may transfer, on such terms and for such period as may be determined
by the Board with the approval of the Reserve. Bank, from any of the other two
Funds, referred to in section 22, such amount as may be necessary to meet the
requirements of the Deposit Insurance Fund or the Credit Guarantee Fund, as the
case may be.
Preparation of
balance sheet
etc. by
Corporation
28. (1)
The balance-sheet and accounts of the Corporation shall be prepared and

maintained in such form and manner as may be prescribed.
(2)
The Board shall cause the books and accounts of the Corporation to be
balanced and closed as on the 31st day of December or such other date in
each year as the Central Government may, by notification in the Official
Gazette, specify;
Provided that with a view to facilitating the transition from one period of
accounting to another period of accounting under this sub-section, the Central
Government, may, by order published in the Official Gazette, make such
provisions as it considers necessary or expedient for the balancing and closing
of, or for other matters relating to, the books or accounts in respect of the
concerned years.
Audit
29. (1)
The affairs of the Corporation shall be audited by an auditor duly qualified

to act as an auditor under sub-section (1) of section 226 of the Companies
20

Act, 1956, who shall be appointed by the Board with the previous approval
of the Reserve Bank and shall receive such remuneration from the
Corporation as the Reserve Bank may fix.
(2)
The auditor shall be supplied with a copy of the annual balance-sheet of the
Corporation and it shall be his duty to examine it together with the accounts
and vouchers relating thereto and he shall have a list delivered to him of all
books kept by the Corporation and shall at all reasonable times have access
to the books, accounts and other documents of the Corporation and may,
in relation to such accounts, examine any director of the Board or any officer
or employee of the Corporation.
(3)
The auditor shall make a report to the Corporation upon the annual
balance-sheet and accounts and in every such report he shall state whether
in his opinion the balance-sheet is a full and fair balancesheet containing all necessary particulars and properly drawn up
so as to exhibit a true and correct view of the state of affairs of the
Corporation and in case he had called for any explanation or
information from the Board, whether it has been given and whether it is
satisfactory.
(4)
Without prejudice to anything contained in the preceding sub-sections, the

Central Government may at any time appoint the Comptroller and AuditorGeneral of India to examine and report upon the accounts of the Corporation,
and any expenditure incurred by him in connection with such examination
and report shall be payable by the Corporation to the Comptroller and
Auditor-General of India.
30. (1)
Notwithstanding anything contained in the Income-taxAct, 1961, the

Corporation shall not be liable to pay any tax under that Act on any of its
income, profits or gains for the accounting year during which the Corporation
is established and for fourteen accounting years following that year.
(2)
Income-tax
and Supertax
43 of 1961
Notwithstanding anything contained in the Income-tax Act 1961, the

Corporation shall not be liable to pay any tax under that Act on any of its
income, profits or gains for the period commencing from the first day of
January 1977, and ending with the commencement of the accounting year
during which Chapter 11 of the Deposit Insurance Corporation (Amendment
and Miscellaneous Provisions) Act, 1978, comes into force and for that
accounting year and eight accounting years following that year.
31. After making provision for all its liabilities and for all other matters for
which provision is necessary or expedient, including any contribution
to the staff and superannuation funds, the Corporation shall transfer the
balance, if any, or any of its income in its General Fund to one or more
21
Reserve Fund

reserve funds to be utilised in such manner and for such purposes as the
Corporation may deem fit.
Annual
accounts and
reports
32. (1)
The Corporation shall furnish to the Reserve Bank within three months
from the date on which its accounts are balanced and closed the balancesheet and accounts together with the auditors report and a report of the
working of the Corporation during the year and copies of the said balancesheet and accounts and reports shall be furnished by the Corporation to the
Central Government.
(2)
The Central Government shall cause every Auditors report and report of
the working of the Corporation to be laid as soon as may be after they are
received before each House of Parliament.
CHAPTER V
MISCELLANEOUS
Staff of
Corporation
Returns from
insured banks
Corporation
to have access
to records
33. (1)
The Corporation may appoint such number of officers and employees as it

considers necessary or desirable for the efficient performance of its functions
and determine the terms and conditions of their appointment and service.
(2)
Without prejudice to the provisions of sub-section (1), it shall be lawful for

the Corporation to utilise, and for the Reserve Bank to make available, the
services of such staff of the Reserve Bank on such terms and conditions as
may be agreed upon between the Corporation and the Reserve Bank.
34. (1)
Notwithstanding anything contained in the Banking Regulation Act, 1949,

or any other law for the time being in force, the Corporation may at any
time direct an insured bank or a credit institution to furnish to it, within
such time as may be specified by the Corporation, such statements and
information relating to the deposits in that bank or the credit facilities granted
by that credit institution as the case may be, as the Corporation may consider
necessary or expedient to obtain for the purposes of this Act.
(2)
The Corporation may, if it considers it expedient and after consulting the

Reserve Bank, publish any information obtained by it under this section in
such consolidated form as it may think fit.
35. (1)
The Corporation shall have free access to all such records of an insured
bank or a credit institution, perusal whereof may appear to the
Corporation to be necessary for the discharge of its functions under this
Act.
(2)
The Corporation may require any insured bank or a credit institution to

furnish to it copies of any of the records referred to in sub-section (1) and
22
81 of 1985

the bank or the credit institution shall be bound to comply with the
requisition.
36. (1)
The Corporation may, for any of the purposes of this Act, request the Reserve
Bank to cause an inspection of the books and accounts or an investigation
of the affairs of an insured bank or a credit institution to be made and on
such request the Reserve Bank shall cause such inspection or investigation
to be made by one or more of its officers, or through such other person or
agency as the Reserve Bank may determine.
(2)
The provisions of sub-section (2) and sub-section (3) of section 35 of the

Banking Regulation Act, 1949 shall apply to an inspection or investigation
under sub-section (1) as they apply to an inspection under that section.
(3)
When an inspection or investigation has been made under this section,

Reserve Bank shall furnish a copy of its report to the Corporation and neither
the bank nor the credit institution, as the case may be inspected or
investigated nor any other bank or credit institution shall be entitled to be
furnished with a copy of such report.
(4)
Notwithstanding anything contained in any law for the time being in force,
no court, tribunal or other authority shall compel the production or disclosure
of a report under this section or of information or material gathered during
the course of an inspection or investigation under this section.
Inspection of
insured banks
by Reserve
Bank
10 of 1949
37. The Corporation shall, on a request in writing from the Reserve Bank, furnish to
it within such time as may be specified by the Reserve Bank, such statements and
information relating to the business or affairs of the Corporation or of an insured
bank as the Reserve Bank may consider necessary or expedient.
Corporation
to furnish
information to
Reserve Bank
38. The Reserve Bank shall, on a request in writing from the Corporation, furnish to
it any report or information relating to an insured bank or a credit institution,
made or obtained by it under or in pursuance of the Reserve Bank of India Act,
1934 or the Banking Regulation Act, 1949.
Reserve Bank
to furnish
information to
Corporation
39. (1)
(2)
Every director, auditor, officer or other employee of the Corporation or an

employee of the Reserve Bank whose services are utilized by the Corporation
under sub-section (2) of section 33 shall, before entering upon his duties,
make a declaration of fidelity and secrecy in the form set out in the First
Schedule to this Act.
The Corporation shall observe, except as otherwise required by law, the
practices and usages customary among the bankers, and, in particular, it
shall not divulge any information relating to an insured bank or its customers
or a credit institution or its customers except in circumstances in which it
is, in accordance with law or practices or usages customary among bankers,
necessary or appropriate for the Corporation to divulge such information.
23
2 of 1934
10 of 1949
Declaration
of fidelity
and secrecy

Indemnity of
directors
Defects in
appointments
not to
invalidate
acts, etc.
40. (1)
Every director of the Board shall be indemnified by the Corporation against

all losses and expenses incurred by him in, or in relation to, the discharge of
his duties except such as are caused by his own willful act or default.
(2)
A director of the Board shall not be responsible for any other director or, for
any other officer or other employee of the Corporation, or for any loss or
expenses resulting to the Corporation from the insufficiency or deficiency
of value of or title to any property or security acquired or taken on behalf of
the Corporation or the insolvency or wrongful act of any debtor or any
person under obligation to the Corporation or anything done in good faith
in the execution of the duties of his office or in relation thereto.
41. (1)
No act or proceeding of the Board or of any committee of the Corporation

shall be questioned on the ground merely of the existence of any vacancy or
defect in the constitution of the Board or committee.
(2)
No act done by any person acting in good faith as a director of the Board
shall be deemed to be invalid merely on the ground that he was disqualified
to be a director or that there was any other defect in his appointment.
Protection of
action taken
under this
Act
42. No suit or other legal proceeding shall lie against the Corporation or the Reserve
Bank or any director of the Board or any officer of the Corporation or the Reserve
Bank or any other person or agency authorised by the Corporation or the Reserve
Bank to discharge any functions under this Act for any damage caused or likely to
be caused by anything which is in good faith done or intended to be done in
pursuance of this Act.
Companies
Act, 1956
and
Insurance
Act, 1938
not to apply
43. Nothing in the Companies Act, 1956 or the Insurance Act, 1938, shall apply to
the Corporation.
Liquidation of
Corporation
44. (1)
The Corporation shall not be placed in liquidation save by order of the

Central Government and in such manner as the Government may direct.
(2)
On the liquidation of the Corporation
(a)
the outstanding assets of the Corporation in so far as they relate to the Deposit
Insurance Fund shall be distributed among the insured banks in such manner
and in such proportion as may be determined by the Central Government
having regard to the amounts of premium paid by them during any prescribed
period or the deposits of the said banks as on the date of liquidation of the
Corporation or other relevant circumstances;
(b)
the remaining outstanding assets of the Corporation shall be transferred to

the Reserve Bank.
24

45. In the discharge of its functions under this Act, the Corporation shall be guided
by such directions in matters of policy involving public interest as the Central
Government may after consulting the Reserve Bank give to it in writing, and if
any question arises whether the direction relates to a matter of policy involving
public interest, the decision of the Central Government thereon shall be final.
Power of
Central
Government
to give
directions
46. Any dispute as to the amount of premium due from any insured bank shall be
decided by the Central Government and the decision of that Government shall be
final.
Dispute as to
amount of
premium
47. (1)
Whoever in any return, balance-sheet, or other document or in any

information required or furnished by or under or for the purposes of any
provision of this Act, willfully makes a statement which is false in any
material particular, knowing it to be false, or willfully omits to make a
material statement, shall be punishable with imprisonment for a term which
may extend to three years and shall also be liable to fine.
Penalties
(2)
If any person fails to produce any book, account or other document, or to

furnish any statement or information which under the provisions of this
Act, it is his duty to produce or furnish, he shall be punishable with a fine
which may extend to two thousand rupees in respect of each offence and in
the case of a continuing failure, with an additional fine which may extend
to one hundred rupees for every day during which the failure continues
after conviction for the first such failure.
48. (1)
Where an offence has been committed by a company, every person who, at

the time the offence was committed, was in charge of, and was responsible
to the company for the conduct of the business of the company, as well as
the company, shall be deemed to be guilty of the offence and shall be liable
to be proceeded against and punished accordingly :
Provided that nothing contained in this sub-section shall render any such
person liable to any punishment provided in this Act if he proves that the
offence was committed without his knowledge or that he exercised all due
diligence to prevent the commission of such offence.
(2)
Notwithstanding anything contained in sub-section (1), where an offence

under this Act has been committed by a company and it is proved that the
offence has been committed with the consent or connivance of, or is
attributable to any gross negligence on the part of any director, manager,
secretary or other officer of the company, such director, manager, secretary
or other officer shall also be deemed to be guilty of that offence and shall be
liable to be proceeded against and punished accordingly.
Explanation - For the purposes of this section, 25
Offences by
companies
Cognizance
and trial of
offences
(a)
company means any body corporate and includes, a co-operative society,

or a firm or other association of individuals; and
(b)
director in relation to a firm, means a partner in the firm and in relation to

a co-operative society includes any member of a committee of management
or other managing body (by whatever name called) to which the management
of the affairs of the bank is entrusted.
49. (1)
Notwithstanding anything contained in the Code of Criminal Procedure,

1973, no court shall take cognizance of any offence punishable under this
Act except upon a complaint, in writing, made by an officer of the
Corporation, generally or specially authorised in writing in this behalf by
the Board, and no court, inferior to the Court of a Metropolitan Magistrate
or a Judicial Magistrate of the first class, shall try any such offence.
(2)
Notwithstanding anything contained in the Code of Criminal Procedure,

1973, a Magistrate may, if he sees reason so to do, dispense with the personal
attendance of the officer of the Corporation filing the complaint, but the
Magistrate may, in his discretion, at any stage of the proceedings, direct the
personal attendance of the complainant.
50. (1)
The Board may, with the previous approval of the Reserve Bank, by
notification in the Official Gazette, make regulations not inconsistent with
this Act to provide for all matters for which provision is necessary or
expedient for the purpose of giving effect to the provisions of this Act.
(2)
In particular and without prejudice to the generality of the foregoing power,

such regulations may provide for -
2 of 1974
2 of 1974
Regulations
66 of 1988
(a)
the times and places of the meetings of the Board or of any committee
constituted under this Act and the procedure to be followed at such
meetings including the quorum necessary for the transaction of
business;
(b)
the number of directors constituting an Executive committee, and the

functions that such committee shall discharge;
(c)
the functions which any other committee may discharge under this
Act;
(d)
the fees and allowances that may be paid to the members of a committee
other than directors of the Board;
(e)
the fees and allowances that may be paid to the directors of the Board;
(f)
the periods for which, the times at which and the manner in which
premium may be paid by an insured bank;
26

(g)
the interest which may be charged from an insured bank where it

makes default in payment of premium;
(h)
the manner in which and the time within which the amounts referred
to in section 21 may be paid;
(i)
the form and the manner in which the balance-sheet and the accounts
of the Corporation shall be prepared or maintained; and
(j)
any other matter which is to be, or may be, prescribed.
(3)
Any regulation which may be made by the Board under this Act may be
made by the Reserve Bank within three months of the establishment of the
Corporation; and any regulation so made may be altered or rescinded by the
Board in the exercise of its powers under this Act.
(4)
Every regulation shall, as soon as may be after it is made under this Act by
the Board, be forwarded to the Central Government and that Government
shall cause a copy of the same to be laid before each House of Parliament,
while it is in session, for a total period of thirty days which may be comprised
in one session or in two or more successive sessions, and if, before the
expiry of the session immediately following the session or the successive
sessions aforesaid, both Houses agree in making any modification in the
regulation, or both Houses agree that the regulation should not be made, the
regulation shall thereafter have effect only in such modified form or be of
no effect, as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously
done under that regulation.
51. The enactments specified in the Second Schedule to this Act shall be amended in
the manner provided therein.
27
Amendment
of certain
enactments

THE FIRST SCHEDULE
(See section 39)
Declaration of fidelity and secrecy
I do hereby declare that I will faithfully, truly and to the best of my skill and
ability execute and perform the duties required of me as director, auditor, officer or
other employee (as the case may be) of the Deposit Insurance and Credit Guarantee
Corporation and which properly relate to the office or position held by me in the said
Corporation.
I further declare that I will not communicate or allow to be communicated to any
person not legally entitled thereto any information relating to the affairs of the Deposit
Insurance and Credit Guarantee Corporation or to the affairs of any person having any
dealing with the said Corporation; nor will I allow any such person to inspect or have
access to any books or documents belonging to or in the possession of the Deposit
Insurance and Credit Guarantee Corporation and relating to the business of the said
Corporation or the business of any person having any dealing with the said Corporation.
(Signature)
Signed before me:
THE SECOND SCHEDULE
(see Section 51)
Amendment of certain enactments
PART I
AMENDMENTS TO THE RESERVE BANK OF INDIA ACT, 1934
(2 of 1934)
Amendments
1.
In section 3, after clause (bb), insert the following clause, namely
(bbb) Deposit Insurance Corporation means the Deposit Insurance Corporation

established under section 3 of the Deposit Insurance Corporation Act, 1961.
28

2.
In section 17, (a) after clause (4C), insert the following clause, namely :
(4D) the making to the Deposit Insurance Corporation of loans and advances;
and generally assisting the Corporation in such manner and on such terms
as may be determined by the Central Board.
(b)
in clause (8A), after the capital of, insert the Deposit Insurance
Corporation.
PART II
AMENDMENTS TO THE BANKING REGULATION ACT, 1949

(10 of 1949)
Amendments
1.
In section 5, after clause (f), insert the following clause, namely :(ff)
2.
Deposit Insurance Corporation means the Deposit Insurance Corporation

established under section 3 of the Deposit Insurance Corporation Act,
1961.
In section 43A,
(i)
in sub-section (6), for the forgoing provisions, substitute the provisions

of this section;
(ii)
After sub-section (8), insert the following sub-sections, namely:
(9)
Nothing contained in sub-sections (2), (3), (4), (7) and (8) shall apply to a
banking company in respect of the depositors of which the Deposit Insurance
Corporation is liable under section 16 of the Deposit Insurance Corporation
Act, 1961.
(10) After preferential payments referred to in sub-section (1), have been made
or adequate provision has been made in respect thereof, the remaining assets
of the banking company referred to in sub-section (9) available for payment
to general creditors shall be utilised for payment on pro-rata basis of the
debts of the general creditors and of the sums due to the depositors :
Provided that where any amount in respect of any deposit is to be paid by
the liquidator to the Deposit Insurance Corporation under section 21 of the
Deposit Insurance Corporation Act, 1961, only the balance, if any, left after
making the said payment shall be payable to the depositor.
29

PART III
AMENDMENTS TO THE INDUSTRIAL DISPUTES ACT, 1947

(14 of 1947)
In section 2, in sub-clause (i) of clause (a), after to an industrial dispute
concerning insert the Deposit Insurance Corporation established under section 3 of
the Deposit Insurance Corporation Act, 1961, or.
30

GUARANTEE CORPORATION GENERAL
REGULATIONS, 1961
(As modified upto September 2006)
DEPOSIT INSURANCE AND CREDIT GUARANTEE

CORPORATION GENERAL REGULATIONS, 1961
CONTENTS
CHAPTER I
INTRODUCTORY
REGULATIONS
1.
Short title
2.
Definitions
CHAPTER II
OBLIGATIONS OF DIRECTORS
3.
No Director to deal with matters with which he is personally concerned
4.
Obligation of Director to give information of disqualifications
5.
Board to inform Central Government regarding disqualifications
CHAPTER III
MEETINGS OF THE BOARD AND COMMITTEES
6.
Meetings of the Board
7.
Resolution without meeting of the Board valid
8.
Executive Committee
9.
Appointment of ad hoc Committees
CHAPTER IV
GENERAL PROVISIONS
10.
No advance to be made to officers of the Corporation without

sanction of the Board
11.
Delegation to the Executive Committee
12.
Manner and form in which contracts binding on the

Corporation may be executed

13.
Accounts, receipts and documents of Corporation by whom

to be signed
14.
Plaints etc. by whom to be signed
15.
Common seal of the Corporation
16.
Service of notice on the Corporation
17.
Remuneration of Directors and Members of Committees
18.
Annual Statement of Accounts
CHAPTER V
INSURED BANKS
19.
Payment of premium by an insured bank
20.
Payment of interest on overdue premium
21.
Waiver of interest due to the Corporation
22.
Repayments to the Corporation
23.
Mode of payments to the Corporation
THE SCHEDULE
Form A - Form of Balance Sheet of the Deposit Insurance Fund,
Credit Guarantee Fund and the General Fund
8-11
Form B - Form of Revenue Account of the Deposit Insurance Fund, Credit Guarantee 12-15
Fund and the General Fund
ii
DEPOSIT INSURANCE AND CREDIT GUARANTEE

CORPORATION GENERAL REGULATIONS, 1961
In exercise of the powers conferred by sub-section (3) of section 50 of the Deposit
Insurance and Credit Guarantee Corporation Act, 1961 (No. 47 of 1961) the Reserve
Bank of India is pleased to make the following regulations, namely
CHAPTER I
INTRODUCTORY
1.
These Regulations may be called the Deposit Insurance and Credit Guarantee
Corporation General Regulations, 1961.
2.
In the Regulations, unless there is anything repugnant in the subject or

context, (a)
The Act means the Deposit Insurance and Credit Guarantee Corporation
Act, 1961;
(b)
Director means Director of the Deposit Insurance and Credit Guarantee

Corporation;
(c)
Other expressions used and not defined in these Regulations but used in
the Act have the meaning respectively assigned to them in the Act.
Short title
Definitions
CHAPTER 11
OBLIGATIONS OF DIRECTORS
3.
(i)
Every director who is directly or indirectly concerned or interested in any

contract or arrangement entered into by or on behalf of the Corporation
shall disclose the nature of his interest at the meeting of the Board at which
the contract or arrangement is determined on, if his interest then exists, or
in any other case at the next meeting of the Board after the acquisition of
his interest or the making of the contract or arrangement.
(ii)
No director shall vote on any contract or arrangement in which he is directly

or indirectly concerned or interested and if he does his vote shall not be
counted.
4.
A director nominated under clause (d) or under clause (e) of sub-section (1) of
section 6 of the Act shall, as soon as may be, inform the Board when he becomes
subject to any of the disqualifications set out in the Act.
5.
The Board shall forthwith inform the Central Government, if it comes to the
notice of the Board, that any director has become subject to any of the
disqualifications specified in section 6 of the Act.
1
No Director
to deal with
matters with
which he is
personally
concerned
Obligation of
Director to give
information of
disqualifications
Board to
inform Central
Governement
regarding
disqualifications

CHAPTER III
MEETINGS OF THE BOARD AND COMMITTEES

Meetings of
the Board
6.
(i)
The Board shall ordinarily meet once a quarter in each year
Section 7
(ii)
Meetings of the Board shall be convened by the Chairman and shall be

ordinarily held at Bombay but if so directed by the Board, may be held at
any other place in India.
Section 50
(2) (a)
(iii) Ordinarily not less than one clear fortnights notice shall be given of each
meeting of the Board and such notice shall be sent to every director to his
registered address. Should it be found necessary to convene an emergency
meeting, sufficient notice shall be given to every director, who is at that
time in India, to enable him to attend.
(iv) No business other than that for which the meeting was convened shall be
discussed at a meeting of the Board, except with the consent of the Chairman
of the meeting and a majority of the directors present, unless one clear
weeks notice has been given of the same in writing to the Chairman.
(v)
Three directors of whom one shall be a director nominated under clause

(d) or under clause (e) of sub-section (1) of section 6 shall form a quorum
for the transaction of business.
(vi) A copy of the proceedings of each meeting of the Board shall be circulated
for the information of the Directors as soon as possible after the meeting
and the minutes of each meeting shall be signed by the Chairman of that or
the next succeeding meeting.
Resolution
without
meeting of
Board valid
7.
A resolution in writing circulated to all the directors in India and signed by a

majority of such directors who are then in India, one of whom shall be the Chairman
or a director nominated by the Reserve Bank, shall be valid and effectual and
shall be deemed to be the resolution so passed by the Board on the date on which
it is signed by the last signatory to the resolution.
Provided that if any dissenting director requires in writing that any resolution so
passed shall be placed before a meeting of the Board, the resolution shall not be
deemed to be valid and effectual as aforesaid, unless the same is passed at such
meeting.
The Executive
Committee
Section 8 and
50 (2) (a)
and (b)
8.
(i)
The executive Committee of the Corporation shall consist of the Chairman

and the director nominated under clause (b) of sub-section (1) of section 6
of the Act and one of the directors nominated either under clause (d) or
under clause (e) of sub-section (1) of section 6 of the Act as may be specified
by the Board from time to time.

Provided that any director, who may be present in the town in which a
meeting of the Executive Committee is held may attend such meeting and
such director shall be deemed to be a member of the Executive Committee
for the meeting which he so attends.
(ii)
The Executive Committee shall meet once in each quarter or at such other
times at Bombay or at such other place as the Chairman may specify.
Sufficient notice shall be given to the members of the Executive Committee
to enable them to attend its meetings.
(iii) Any two of the directors referred to in sub-regulation (i) above shall form a
quorum for the transaction of business by the Executive Committee.
(iv) A resolution in writing and circulated to the three directors of the Executive
Committee referred to in sub-regulation (i) and approved by any two of
them shall be valid and effectual and shall be deemed to be the resolution
passed by the Executive Committee on the date on which it is signed by the
last signatory to the resolution.
9.
(v)
The provisions of the Act, and save as otherwise provided in the regulation,
these regulations shall apply to the meetings of the Executive Committee as
if they were meetings of the Board.
(i)
The Board may appoint ad hoc Committees to assist the Corporation in the
efficient discharge of its functions.
(ii)
A person who is a member of an ad hoc Committee who is directly or

indirectly interested in any contract or arrangement which comes up before
such ad hoc Committee shall disclose the nature of his interest to the Board
and to such ad hoc Committee and shall not be present at any meeting of the
ad hoc Committee when such contract or arrangement is being discussed,
unless his presence is required by the other members of the Committee for
the purpose of eliciting information. When any member is so required to be
present, he shall not vote on any such contract or arrangement and if he
does so, his vote shall not be counted.
(iii) Every member of an ad hoc Committee shall, before entering upon his duties,
be required to sign a declaration of fidelity and secrecy on the lines of the
form set out in the first schedule to the Act.
(iv) The quorum for a meeting of an ad hoc Committee shall be one-third of its
strength (any fraction contained in that one-third being rounded off as one)
or two members, whichever is higher.
(v)
The provisions of the Act and save as otherwise provided in this Regulation,
these Regulations shall apply to meetings of an ad hoc Committee as if they
were meetings of the Board.
3
Appointment
of ad hoc
Committees
Section 8(3)
Section 50
(2) (c)

CHAPTER IV
GENERAL PROVISIONS
No advance to
be made to
officers of the
Corporation
without
sanction of
the Board
Delegation to
the Executive
Committee
Section 8(2)
Section
50(2)(b)
Manner and
form in which
contracts
binding on the
Corporation
may be
executed
10. No advance shall be made to the Chairman or any officer or employee of the
Corporation without the sanction of the Board.
Provided that sanction of the Board shall not be required for any advance given to
the Chairman or any officer or other employee given in accordance with the rules
framed by the Reserve Bank.
11. The Executive Committee shall have full powers to transact all the usual business
of the Corporation except such matters as are specifically reserved by the Act to
the Central Government or the Board or by the Board to itself.
12. (1)
(2)
Accounts,
receipts and
documents of
Corporation
by whom to
be signed
Plaints, etc. by
whom to be
signed.
(Regulation
19 of RBI
General
Regulations)
Contracts on behalf of the Corporation may be made as follows:

(i)
Any contract which, if made between private persons, would be by

law required to be in writing, signed by the parties to be charged
therewith, may be made on behalf of the Corporation in writing signed
by any person acting under its authority, express or implied, and may
in the same manner be varied or discharged.
(ii)
Any contract which, if made between private persons, would by law

be valid although made by parole only and not reduced in writing,
may be made by parole on behalf of the Corporation by any person
acting under its authority, express or implied, and may in the same
manner be varied or discharged.
All contracts made according to the provisions of this Regulation shall be

effectual in law and shall bind the Corporation and all other parties thereto
and their legal representatives.
13. The Director nominated under clause (b) of sub-section (1) of section 6 of the Act
and such officers of the Corporation as the Board may authorise in this behalf by
notification in the Official Gazette are hereby severally empowered for and on
behalf of the Corporation to endorse and transfer promissory notes, stock-receipts,
stock debentures, shares, securities and documents of title to goods, standing in
the name of or held by the Corporation, and to draw, accept and endorse bills of
exchange and other instrument in the current and authorised business of the
Corporation and to sign all other accounts, receipts and documents connected
with such business.
14. Plaints, written statements, affidavits and all other documents connected with
legal proceedings may be signed and verified on behalf of the Corporation by any
officer empowered by or under Regulation 13 to sign documents for and on behalf
of the Corporation.
4
95 of 2005
90 of 2014
15. The Common Seal of the Corporation shall not be affixed to any instrument except
in the presence of the Chairman or the director nominated under clause (b) of
sub-section (1) of section 6 of the Act, who shall sign his name to the instrument
in token of his presence, and such signing shall be independent of the signing of
any person who may sign the instrument as a witness. Unless so signed as aforesaid
such instrument shall be of no validity.
Common
Seal of the
Corporation
16. A notice may be served on the Corporation by leaving it or sending it by post to

its Head Office.
Service of
notice on the
corporation
17. (i)
A Director nominated under clause (d) or under clause (e) of Sub-Section

(1) of Section 6 of the Act shall receive a fee of Rs. 10,000/ - for each Board
meeting which he attends and a fee of Rs. 5,000/ - for each Committee
meeting which he attends.
Remuneration
of Directors
and Members
of Committees
Members of a Committee shall receive a fee of Rs. 5,000/- for each

Committee meeting which they attend.
Section 8(5) &

9 Section 50 (2)
(d) and (e)
ii)
(iii) Directors and Members shall be reimbursed their travelling and halting
expenses, if any, on such scale as may be fixed by the Board from time to
time.
18. The annual accounts of the Corporation shall be prepared and set out in the
following manner :(i)
A balance sheet as at the end of each year in Form A in the schedule to

these Regulations showing the position of the Deposit Insurance Fund, the
Credit Guarantee Fund and the General Fund separately.
(ii)
A revenue account for the year set out in Form B in the schedule to these
Regulations showing the income and expenditure of the Deposit Insurance
Fund, the Credit Guarantee Fund and the General Fund separately.
Annual
Statement of
accouts
Section 28 (1)
Section
50(2)(1)
CHAPTER V
INSURED BANKS
19. (1)
An insured bank shall pay to the Corporation premium at the rate notified
by the Corporation from time to time for each of the half-yearly periods
ending on the last day of March and September in every year. Such premium
shall be paid in advance on the basis of the total deposits as at the
close of the business on the last day of the preceding half-year or if that
day be a public holiday under the Negotiable Instruments Act, 1881, the
preceding working day. The advance payment towards the premium due in
respect of each half-year shall be made as soon as possible after the
commencement of the half-year but in any event not later than the last day
of the second month of that half-year.
5
Payment of
premiun by an
insured bank
Section 15(2)
and Section
50(2) (f)

Provided that where a bank is registered as an insured bank after the first
day of a half-year, the first premium payable by such bank in respect of that
half-year shall be an amount bearing to the premium, which would have
been payable by that bank in respect of the half-year in which it was registered
had it been registered at the commencement of such half-year, the same
proportion as the number of days in that half-year from the date of such
registration to the end of the half-year bears to the total number of days in
that half-year, and such premium shall be paid within thirty days of the
receipt by that bank of the intimation under section 14 of the Act.
Provided further that in the case of a new banking company the premium
payable by it in respect of the first half-year shall be arrived at on the basis
of one half of the maximum estimated deposits mentioned by such new
banking company in its application to the Reserve Bank for a licence to
commence banking business under section 22 of the Banking Regulation
Act, 1949.
(2)
The actual premium payable by an insured bank in respect of a half-year

shall be determined on the basis of its total deposits as on the last day of
the preceding half-year.
Provided that where the registration of an insured bank has been cancelled,
the actual premium payable by such bank in respect of the period in a halfyear upto the date of such cancellation shall be determined on the basis of
the deposits outstanding on the date of cancellation of its registration as an
insured bank.
(3)
Every insured bank shall, as soon as possible after the commencement of

each calender half-year but in any event not later than the last day of the
second month of that half-year, furnish to the Corporation a statement, in
duplicate, duly certified as correct by two officials authorised by it, in such
form as may be specified by the Corporation showing the basis on which
the premium payable by that bank has been calculated and the amount of
premium payable by that bank to the Corporation for that half-year.
Provided that if any insured bank is not able, on account of circumstances
beyond its control, to determine the figure of its total deposits referred in
sub-regulation (1), it may provisionally calculate the amount of premium
payable by it to the Corporation on the basis of its total deposits as at the
close of business on the penultimate day of the preceding half-year or if
that day is a public holiday under the Negotiable Instruments Act, 1881, the
preceding working day and pay the half-yearly premium payable by it
accordingly subject to adjustment, if any, being made on the figure of its
total deposits referred to in sub-regulation (1) as soon as possible thereafter

but in any event not later than such date as may be specified by the
Corporation from time to time.
(4)
Payment of
interest on
overdue
premium
Section 15(3)
Section 50(2)(g)
If at anytime after payment of the premium payable to the Corporation for

any period it is found that the insured bank has paid a sum less than the sum
payable by it either on account of an error in the calculation made by it or
on account of an error in the figures furnished by it or otherwise, the insured
bank shall be liable to pay immediately to the Corporation such additional
sum as may be due on account of the error in calculation or in the figures or
otherwise, with interest, if any, payable under Regulation 20.
20. If an insured bank does not pay on or before the stipulated date the premium
payable by it, or any portion thereof it shall be liable to pay interest on the amount
of premium payable by it or on the unpaid portion thereof, as the case may be, at
8 per cent above the Bank Rate from the beginning of the financial half-year till
the date of payment.
Waiver of
interest due to
the Corporation
21. The Corporation may at any time waive any payment due to it by way of interest
on such conditions and for such period or periods as it may deem fit.
Repayments
to the
Corporation
22. The amounts repayable to the Corporation under sub-section (2) of section 21 of
the Act shall be paid from time to time by, -
Section 21(2)
Section
50(2)(h)
Mode of
payments to
the Corporation
Sections 15(2),
21(2) Section
50(2) (f) and
(h)
(a)
the liquidator as soon as the realisations and other amounts in his hands,
after making provision for expenses payable by that time, are sufficient to
enable him to declare a dividend of not less than one paisa. in the Rupee to
each depositor.
(b)
the insured bank or the transferee bank, as the case may be, as soon as the
realisations and other amounts in its hands, after making provision for
expenses payable by that time in respect of such realisations or other amounts
in its hands are sufficient to enable it after the date of coming into force of
the scheme referred to in section 18 of the Act, to pay or credit in respect of
each depositor a sum not less than one paisa in the Rupee.
23. Any amount payable to the Corporation on account of premium or interest or

otherwise may be paid into the Reserve Bank of India, Bombay or remitted to the
Corporation by crossed cheque, crossed demand draft or telegraphic transfer in
favour of the Corporation and payable at Bombay and drawn on the Reserve
Bank of India, Bombay or an office in Bombay of an insured bank.
113 of 1993
DIF
CGF
Previous
Year
CGF
8. Deficit (Balance as per Revenue Account

Annexed)
7. Other Assets**
6. Estimated liability in respect of claims intimated but

not admitted*
7. Advance from Reserve Bank of India (Section 26 of

the Deposit Insurance and Credit Guarantee
Corporation Act, 1961)
6. Advance to DIF/CGF (Section 27 of the Deposit

Insurance and Credit Guarantee Corporation
Act, 1961)
5. Claims Intimated & Claims admitted but Not paid
4. Interest accrued on investments
Market value
Face value
DIF
5. Advance to DIF/CGF (Section 25A of the Deposit

Insurance and Credit Guarantee Corporation
Act, 1961)
Balance at the end of the year
4. Investment Fluctuation Reserve

Balance at the beginning of the year
Add: Amount provided for during the year
Balance at the end of the year
3. Investments in Central Government Securities

(at cost)
3. Investment Reserve
CGF
2. Cash in Transit
DIF
2. Surplus (Balance as per Revenue Account Annexed)
CGF
ASSETS
1. Balance with the Reserve Bank of India
DIF
Previous
Year
1. Fund (Balance at the end of the year)
LIABILITIES
DIF
(` in million)
DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION

(Established under the Deposit Insurance and Credit Guarantee Corporation Act, 1961) - (Regulation 18 - Form 'A')
Balance Sheet as at the close of business on the 31st March
I. DEPOSIT INSURANCE FUND (DIF) and CREDIT GUARANTEE FUND (CGF)
CGF
2.
3.
Note 1.
TOTAL
TOTAL
* The estimated liability for claims intimated to the Corporation but not admitted has been computed after deducting from the claims actually lodged, an amount
equal to _____________ percent of the gross claims on account of usual rejections/ withdrawal
** Details of each item indicating its nature may be given under these heads
Appropriate note regarding subrogation rights and provision against the same to be given
12. Other Liabilities**
11. Insured Deposits in banks whose registration as

insured banks has been cancelled
10. Insured deposits remaining unclaimed
8. Advance from DIF/CGF (Section 25A of the Deposit

Insurance and Credit Guarantee Corporation Act,
1961)
9.
Advance from DIF/CGF (Section 27 of the Deposit
Insurance and Credit Guarantee Corporation Act,
1961)
Previous
Year
Staff Provident Fund

Staff Gratuity Fund
Other Liabilities*
Staff Leave/ Retirement Fare Concession
Outstanding Expenses
Sundry Creditors
4. Current Liabilities and Provisions
3. Other Reserves

Stock of Stationery
Prepaid Expenses
Sundry Debtors
5. Other Assets*
Furniture, Fixtures & Equipment
(less depreciation)
4. Advance to DIF/CGF, if any (vide Section 27

of the Deposit Insurance and Credit
Guarantee Corporation Act, 1961)
(C) Investment Fluctuation Reserve
2. Investment in Central Government

Securities (At Cost)
(Face Value: Rs.__________)
(Market Value: Rs.__________)
(ii) With Reserve Bank of India
1. CASH
(i) In hand
ASSETS
3. Interest accrued on Investments
Previous
Year
(` in million)
B) Investment Reserve
2. Reserves
A) General Reserve
Add: Surplus transferred from the Revenue Account
1. Capital : Provided by the Reserve Bank of India (RBI)

under Section 4 of the Deposit Insurance and Credit
Guarantee Corporation Act, 1961)
LIABILITIES

(Established under the Deposit Insurance and Credit Guarantee Corporation Act, 1961)
(Regulation 18 - Form 'A')
Balance Sheet as at the close of business on the 31st March
II. GENERAL FUND (GF)
* Details of each items indicating its nature may be given under these heads
DIF
CGF
Previous
Year
CGF
Deposit Insurance Premium (including

interest on overdue premium)
By Guarantee Fees (including interest on
overdue guarantee fees)
By Recoveries in respect of Deposit Insurance
claims settled/Guarantee claims paid
By
By Balance of Fund at the beginning of the year
By Balance brought forward from last year

By Transfer from DIF/CGF
To Balance brought forward from last year

To Transfer to DIF/CGF
To Provision for Income-Tax
By Net Surplus Brought Down
To Net deficit brought down
To Net Surplus Carried Down
To balance of fund at the end of the year
To Interest on advance from DIF/CGF (Section 25A of the

Deposit Insurance and Credit Guarantee Corporation Act,
1961)
To Interest on advance from DIF/CGF (Section 27 of the
Deposit Insurance and Credit Guarantee Corporation Act,
1961)
By Net deficit carried down
DIF
To Interest on advance from Reserve Bank of India (Section

26 of Deposit Insurance and Credit Guarantee
Corporation Act, 1961)
CGF
INCOME
By Income from Investments*
DIF
Previous
Year
To Provision for depreciation in the value of investments

credited to Investment Reserve
Less: Estimated liability in respect of claims intimated but not

admitted at the end of the previous year
Net claims
To Claims:
(a)
Paid during the year
(b)
Admitted but Not paid
Add: Estimated liability in respect of claims intimated but not
admitted at the end of the year
EXPENDITURE

(Form 'B')
Revenue Account for the year ended 31st March
I. DEPOSIT INSURANCE FUND (DIF) AND CREDIT GUARANTEE FUND (CGF)
DIF
CGF
(` in million)
By Balance carried to Balance Sheet
* Profit or loss on sale of Central Government Securities and provisions for depreciation on investments may be added or deducted as the case may be
To Balance carried to Balance Sheet
To Transfer to Investment Fluctuation Reserve
To Transfer to Investment Fluctuation Reserve

To Transfer to Other Reserves (give details)
To Transfer to General Reserve
To Establishment - Travelling & Halting Allowances

To Printing and Stationery
To Postage, Telegrams and Telephones
To Auditors' Fees
To Legal Charges
To Provision for Depreciation in value of Investment
To Miscellaneous Expenses
To Depreciation
To Advertisement
To Balance being excess of income over expenditure
carried down
To Salaries and allowances and contributions to

Staff Provident Fund
To Contribution to Staff Gratuity Fund
To Directors and Committee Members Fees
To Directors and Committee Members Travelling
and other allowances
To Rent, Taxes, Insurance , Lighting etc.
EXPENDITURE
Previous
Year
By Balance being excess

expenditure - brought down
of
income
over
By balance being excess of Expenditure over

Income, if any, transferred to Balance Sheet
By Miscellaneous Receipt
By Interest on Advances to DIF/CGF
By Income from Investments*
INCOME
* Profit or Loss on sale of Government Securities and provision for depreciation on investments may be added or deducted as the case may be
Previous
Year
DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION (DICGC)

(Form 'B')
Revenue Account for the year ended 31st March
II. GENERAL FUND (GF)
(` in million)
LIST OF AMENDING ACTS

1.
The Repealing and Amending Act, 1964 (52 of 1964).
2.
The Finance (No. 2) Act, 1967 (20 of 1967).
3.
The Deposit Insurance Corporation (Amendment) Act, 1968 (56 of 1968).
4.
The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969

(22 of 1969).
5.

(5 of 1970).
6.
The Finance (No. 2) Act, 1971 (32 of 1971).
7.
8.
The Regional Rural Banks Act, 1976 (21 of 1976).
9.
The Deposit Insurance Corporation (Amendment and Miscellaneous Provisions)

Act, 1978 (21 of 1978).
10.

(40 of 1980).
11.
The National Bank for Agriculture and Rural Development Act, 1981 (61 of
1981).
12.
The Finance Act, 1982 (14 of 1982).
13.
The Banking Laws (Amendment) Act, 1983 (1 of 1984).
14.
The Banking Laws (Amendment) Act, 1985 (81 of 1985).
15.
16.
The Banking Public Financial Institutions and Negotiable Instruments Laws

(Amendment) Act, 1988 (66 of 1988).
17.
Banking Companies (Acquisition and Transfer of Understandings) and Financial

Institutions Laws) (Amendment) Act, 2006 (45 of 2006).
LIST OF ABBREVIATIONS USED

Cl.
Ins.
P.
Pt.
Rep.
S., Sec.
Ss.
Subs.
W.e.f.
for
Clause
Inserted
Page
Part
Repealed
Section
Sections
Substituted
With effect from
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Deposit Insurance and Credit Guarantee Corporation Act 1961

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THE DEPOSIT INSURANCE AND CREDIT

For private circulation only

THE DEPOSIT INSURANCE AND CREDIT

THE DEPOSIT INSURANCE AND CREDIT

Short title extent and commencement

Establishment and Incorporation of Deposit Insurance Corporation

Fees and Allowances of Directors

Registration of Existing Banking Companies

Registration of New Banking Companies

11A. Registration of Regional Rural Banks

Registration of Defunct Banking Companies

13A. Registration of Co-operative Banks

13B. Registration of defunct Co-operative Banks

13D. Circumstances in which Reserve Bank may require winding up of

15A. Cancellation of registration of an insured bank for non-payment of premium

Liability of Corporation in respect of insured deposits

Manner of payment by Corporation in case of winding up of an insured bank

Manner of payment by Corporation in case of scheme of compromise or

Discharge of the liability of Corporation

Provision for unpaid amounts

Repayment of the amount to the Corporation

21B. Corporation to act as agent of Central Government

Deposit Insurance Fund

23A. Credit Guarantee Fund

25A. Amount in one Fund may be transferred to the other Fund

Advances by Reserve Bank

Advances from General Fund to Deposit Insurance Fund or

Preparation of balance sheet, etc., by Corporation

Income-tax and Super-tax

Annual accounts and reports

Returns from insured banks

Corporation to have access to records

Inspection of insured banks by Reserve Bank

Corporation to furnish information to Reserve Bank

Reserve Bank to furnish information to Corporation

Declaration of fidelity and secrecy

Defects in appointments not to invalidate acts, etc.

Protection of action taken under this Act

Companies Act, 1956 and Insurance Act, 1938 not to apply

Powers of Central Government to give directions

Dispute as to amount of premium

Cognizance and trial of offences

Amendment of certain enactments

THE FIRST SCHEDULE DECLARATION OF FIDELITY AND SECRECY

THE SECOND SCHEDULE AMENDMENT OF CERTAIN ENACTMENTS

THE DEPOSIT INSURANCE AND CREDIT GUARANTEE

It extends to the whole of India.

In this Act, unless the context otherwise requires, (a)

banking means the accepting, for the purpose of lending or investments,

banking company means any company which transacts the business of

Explanation Any company which is engaged in the manufacture of goods or

Board means the Board of directors constituted under section 6;

company means any company as defined in section 3 of the companies

The Deposit Insurance and Credit Guarantee Corporation Act, 1961

Corporation means the Deposit Insurance and Credit Guarantee

(ee) corresponding new bank means a corresponding new bank

a corresponding new bank;

(iii) a Regional Rural Bank;

defunct banking company means a banking company (i)

which has been prohibited from receiving fresh deposits; or

which has been ordered to be wound up; or

(iv) which has ceased to be a banking company within the meaning of