When you keep money in a bank, two questions matter: is the money safe if the bank fails, and where can you complain if the bank treats you unfairly? India has answers to both. The Deposit Insurance and Credit Guarantee Corporation (DICGC) insures bank deposits, and the RBI Integrated Ombudsman Scheme settles customer complaints free of cost. Exams ask about the insurance limit, the 90-day rule and the ombudsman scheme. This post explains them in simple words. It ends with 15 previous year questions.
Key Points (Quick Revision)
- DICGC is a wholly owned subsidiary of the RBI, set up in 1978.
- Deposits are insured up to ₹5 lakh per depositor per bank, since 4 February 2020 (earlier ₹1 lakh).
- Banks - not depositors - pay the premium, which has been 12 paise per ₹100 of deposits.
- Since the 2021 amendment, depositors get their insured money within 90 days when restrictions are placed on a bank.
- The RBI Integrated Ombudsman Scheme, 2026 replaced the 2021 scheme from 1 July 2026.
1. About DICGC
- DICGC works under the Deposit Insurance and Credit Guarantee Corporation Act, 1961.
- It was formed in 1978 by merging the Deposit Insurance Corporation (1962) and the Credit Guarantee Corporation of India (1971).
- It is a wholly owned subsidiary of the RBI.
2. What is insured
| Point | Detail |
|---|---|
| Limit | ₹5 lakh per depositor per bank, including principal and interest |
| Deposits covered | Savings, fixed, current and recurring deposits |
| Banks covered | Commercial banks (including branches of foreign banks in India), small finance banks, payments banks, local area banks, regional rural banks and cooperative banks |
| Not covered | Deposits of Central and State governments, foreign governments and other banks; primary agricultural credit societies are outside the scheme |
| Premium | Paid by the bank; it has been 12 paise per ₹100 of deposits |
The limit applies per bank. Money in different banks is insured separately, but different branches of the same bank count as one.
3. The 90-day rule
Earlier, depositors of a failed bank sometimes waited years for their money. The DICGC (Amendment) Act, 2021 changed this:
- When the RBI places a bank under restrictions (such as a moratorium or all-inclusive directions), the bank must give a list of depositors to DICGC within 45 days.
- DICGC must pay insured depositors up to ₹5 lakh within 90 days.
- The period can be extended if a merger or rescue plan is being worked out.
4. RBI Integrated Ombudsman Scheme
An ombudsman is an official who handles complaints of the public against an organisation, free of cost. In banking, the RBI runs this system.
- The RBI Integrated Ombudsman Scheme, 2021 brought earlier separate schemes - for banks, NBFCs and digital transactions - under one umbrella, with the idea of "One Nation, One Ombudsman".
- The Reserve Bank - Integrated Ombudsman Scheme, 2026 replaced it from 1 July 2026. Complaints filed before that date continue under the 2021 scheme.
5. How to complain under the 2026 scheme
- First complain to the bank or financial entity itself.
- If it does not reply within 30 days, or the reply is not satisfactory, approach the RBI Ombudsman.
- File within 90 days after the end of the entity's response period or its last reply, whichever is later.
- Complaints can be filed online through the RBI's complaint portal, or by email or post to its central processing centre.
There is no fee to file a complaint.
6. Compensation and appeal
| Item | 2021 scheme | 2026 scheme |
|---|---|---|
| Compensation for consequential loss | Up to ₹20 lakh | Up to ₹30 lakh |
| Compensation for harassment, time and mental agony | Up to ₹1 lakh | Up to ₹3 lakh |
| Limit on amount in dispute | None | None |
Appeals against an ombudsman's decision go to an Appellate Authority - under the 2026 scheme, the Executive Director in charge of the RBI's Consumer Education and Protection Department.
7. Why these protections matter
- Deposit insurance builds trust in banks and prevents panic withdrawals.
- A large majority of deposit accounts in India are fully covered by the ₹5 lakh limit, because most balances are smaller than that.
- The ombudsman gives ordinary customers a quick and free way to settle disputes without going to court.
8. Previous year questions
- DICGC is a subsidiary of which institution? – RBI
- In which year was DICGC formed? – 1978
- Under which Act does DICGC work? – DICGC Act, 1961
- What is the current deposit insurance limit per depositor per bank? – ₹5 lakh
- From when has the ₹5 lakh limit applied? – 4 February 2020
- What was the insurance limit before 2020? – ₹1 lakh
- Who pays the deposit insurance premium? – The bank
- What has the deposit insurance premium been? – 12 paise per ₹100
- Within how many days must DICGC pay depositors after restrictions on a bank? – 90 days
- Which law brought in the 90-day rule? – DICGC (Amendment) Act, 2021
- Are primary agricultural credit societies covered by DICGC? – No
- Which scheme replaced the RBI Integrated Ombudsman Scheme, 2021? – Reserve Bank - Integrated Ombudsman Scheme, 2026
- From which date does the 2026 ombudsman scheme apply? – 1 July 2026
- What is the maximum compensation for consequential loss under the 2026 scheme? – ₹30 lakh
- Is there a fee to file a complaint with the RBI Ombudsman? – No
9. How to revise this topic
Start with DICGC: RBI subsidiary, Act of 1961, formed 1978 by merging DIC (1962) and CGCI (1971).
Next, fix the insurance rules: ₹5 lakh per depositor per bank since 4 February 2020, premium paid by banks (12 paise per ₹100), PACS not covered.
Then learn the 90-day rule: DICGC Amendment Act 2021, list in 45 days, payment in 90 days.
Finally, remember the ombudsman: 2021 integrated scheme, replaced by the 2026 scheme from 1 July 2026; ₹30 lakh + ₹3 lakh compensation; no fee; appeal to the Executive Director of CEPD.
10. Frequently Asked Questions
How much of my bank deposit is insured?
Deposits are insured by DICGC up to ₹5 lakh per depositor per bank, including principal and interest, since 4 February 2020.
Who pays for deposit insurance?
The bank pays the premium to DICGC. It has been 12 paise per ₹100 of deposits. Depositors do not pay anything.
How soon do depositors get money if a bank fails?
Under the DICGC (Amendment) Act, 2021, insured depositors are paid up to ₹5 lakh within 90 days of the RBI placing restrictions on the bank.
What is the RBI Integrated Ombudsman Scheme?
It is a free complaint system run by the RBI for customers of banks and other regulated entities. The 2026 scheme replaced the 2021 scheme from 1 July 2026.
How much compensation can the RBI Ombudsman give?
Under the 2026 scheme, up to ₹30 lakh for consequential loss and up to ₹3 lakh for harassment, loss of time and mental agony.
For more Economy topics in simple language, see our RBI and its Functions, UPI, NPCI and Digital Payments and NBFCs and MUDRA posts, or browse the Economy section. Preparing for a bank exam? Start with the IBPS PO guide or join the 100 Hour GS Course.