India’s DICGC Expands Deposit Insurance Coverage to Nearly 2,000 Banks

GG News Bureau
Mumbai, 14th August. India’s Deposit Insurance and Credit Guarantee Corporation (DICGC) has extended its coverage to 1,997 banks, including 140 commercial banks and 1,857 cooperative banks, marking the largest number of deposit-taking institutions covered by deposit insurance globally, second only to the US, RBI Deputy Governor Michael Debabrata Patra announced today.

Speaking at the International Association of Deposit Insurers (IADI) Asia Pacific Regional Committee global conference, Patra highlighted that the DICGC has made interim payments totaling ₹5,359 crore ($640 million) to 3.77 lakh depositors as of March 31. The current deposit insurance coverage limit of ₹5,00,000 (approximately USD 6,000) fully protects 97.8% of deposit accounts and 43.1% of deposit value.

Patra emphasized that the DICGC is focusing on risk management, including developing contingency planning and crisis management frameworks, while undergoing a digital transformation. Public awareness campaigns are being intensified, and there is a strong emphasis on environmental, social, and governance (ESG) policies, particularly climate risk.

At the conference, international experts, including IADI President Alejandro Lopez and IADI Secretary General Dr. Eva Hupkes, are expected to discuss the future of deposit insurance in light of emerging financial technologies such as central bank digital currencies (CBDCs) and tokenized deposits. Topics will also include climate-related financial risks and the need for robust crisis preparedness and business continuity management.

Patra also showcased India’s advancements in digital financial infrastructure, notably the Unified Payments Interface (UPI), which provides 24/7 mobile money transfers and integrates multiple bank accounts and financial services into a single app. India is working on interlinking UPI with fast payment systems of other countries through Project Nexus, an initiative aimed at enabling instant cross-border retail payments. This project will enhance international trade and commerce by making cross-border payments quicker, cheaper, and more reliable, benefiting SMEs by reducing transaction costs and improving cash flow.

Additionally, Patra noted that India is committed to achieving net zero emissions by 2070. The RBI has introduced a framework for accepting green deposits and climate-related financial risk disclosures. The Government of India is also issuing sovereign green bonds as part of its climate goals.

In concluding his remarks, Patra stressed that the rapidly changing global financial landscape demands that deposit insurers and financial safety net participants stay ahead of emerging challenges to maintain public confidence and financial stability.