Deposit Insurance and Credit Guarantee: After the news of financial irregularities in IndusInd Bank, the shareholders of the bank have suffered a loss of crores of rupees, and the depositors of the bank are also now in tension. The problem is whether this fraud in the bank will have any effect on their deposits, or whether the financial condition of the bank will worsen further in the future. However, this irregularity in IndusInd Bank is related to the discrepancy in the derivative portfolio, it has nothing to do with the depositors of the bank. Still, after this sensational disclosure, questions have been raised about the credibility and reputation of the bank.

Let us tell you that if in any situation a bank goes bankrupt or sinks, then what happens to the money of the depositors, how much money do they get as a credit guarantee?

What is a bank credit guarantee?

The money kept in a bank account or FD is completely safe with the guarantee of the government, even if the bank sinks. This is possible due to the 'Credit Guarantee Scheme', under which the amount deposited in the bank is insured.

Security on bank deposits is provided by the 'Deposit Insurance and Credit Guarantee Corporation' (DICGC). It is an RBI-owned subsidiary, which manages the insurance of deposits in commercial banks, regional rural banks, local area banks, and cooperative banks. Deposit insurance is a safety shield that protects bank depositors from the inability to repay the bank loan.

Credit guarantee of how much amount

Under the Credit Guarantee Scheme, currently, the depositor gets insurance coverage for an amount of up to Rs 5 lakh. However, the government has talked about increasing this amount in a proposal. In such a situation, in the coming time, the amount of insurance available on bank deposits under the Credit Guarantee Scheme can be increased to Rs 12 lakh. This means that the government will provide a guarantee on an amount of up to Rs 12 lakh deposited in the bank in a savings, current, or FD account.

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