DICGC needs more resources

Deposit Insurance and Credit Guarantee Corporation (DICGC) will need to increase its reserve ratio, proactively manage its treasury and upgrade its digital infrastructure to have sufficient resources to meet its future payment obligations, a research paper in the RBI bulletin said.

The DICGC which has completed 60 years of operations makes payment of claims to depositors of banks that are liquidated or placed under RBI directions. It also provides funding in matters of approved mergers of weak banks with strong ones. The total authorised capital of the DICGC is ₹50 crore, fully subscribed by the RBI.

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The paper said that out of the ₹181.14 lakh crore total assessable deposits in the banking sector as of March 2023, 46% or ₹83.89 lakh crore is insured. The total deposit insurance fund stood at ₹1.69 lakh crore of March 2023.

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«Our empirical estimates show that the reserve ratio is expected to increase steadily in the near future. All these would go a long way in taking the deposit insurance system to further heights in tune with attaining its objectives,» the paper said.

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