1. Short title, extent and commencement.—(1) This Act may be called 3
[the Deposit Insurance and
Credit Guarantee Corporation] Act, 1961.
(2) It extend to the whole of India.
(3) It shall come into force on such date4
as the Central Government may, by notification in the
Official Gazette, appoint.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “banking” means the accepting for the purpose of lending or investment, 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 5
[and a subsidiary bank], but does not include the 6
[Tamil Nadu Industrial
Investment Corporation Limited].
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, (1 of 1956) and
includes a foreign company within the meaning of section 591 of that Act;
7
[(dd) “co-operative bank” means a State co-operative bank, a Central co-operative bank and a
primary co-operative bank;]
(e) “Corporation” means 2
[the Deposit Insurance and Credit Guarantee Corporation] established
under section 3;
1.The Act has been extended to Goa, Daman and Diu (with modifications) by Reg. 12 of 1962, s. 3 and Schedule
(w.e.f. 1-2-1965) and to Pondicherry by Reg. 7 of 1963, s. 3 and First Schedule.
2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
3. Subs. by s. 8, ibid., for “the Deposit Insurance Corporation” (w.e.f. 15-7-1978).
4. 1st January, 1962, vide notification No. G.S.R. 18, dated 28th December, 1961, see Gazette of India, Part II, sec. 3(i).
5. Subs. by Act 1 of 1984, s. 56, for “, a subsidiary bank and any other banking institution notified under section 51 of the
Banking Regulation Act, 1949 (10 of 1949)” (w.e.f. 15-2-1984).
6. Subs. by Act 56 of 1974, s. 3 and the Second Schedule, for “Madras Industrial Investment Corporation Limited”
(w.e.f. 20-12-1974).
7. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
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1
[(ee) “corresponding new bank” means a corresponding new bank constituted under section 3 of
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or, as the
case may be, under section 3 of the Banking companies (Acquisition and Transfer of Undertakings)
Act, 1980 (40 of 1980);]
2
[(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) a financial institution];
(f) “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
(iv) which has ceased to be a banking company within the meaning of sub-section (2) of
section 36A of 3
[the Banking Regulation Act, 1949 (10 of 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
4
[competent Court; or]
5
[(ix) in respect of which any direction, prohibition, order or scheme referred to in
sub-section (1) of section 18A is issued or made;]
6
[(ff) “defunct co-operative bank” means a co-operative bank—
(i) which has been prohibited from receiving fresh deposits; or
(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 (10 of 1949); or
(v) which has converted itself into a non-banking co-operative 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
1. Subs. by Act 1 of 1984, s. 56, for sub-clause (ee) (w.e.f. 15-2-1984).
2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
3. Subs. by Act 56 of 1968, s.2, for “the Banking companies Act, 1949 (10 of 1949),” (w.e.f. 1-7-1971).
4. Subs. by Act 30 of 2021, s. 2, for “competent Court” (w.e.f. 1-9-2021).
5. Ins. by s. 2, ibid. (w.e.f. 1-9-2021).
6. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
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(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 1
[in a State; or]]
2
[(ix) in respect of which any direction, prohibition, order or scheme referred to in sub-section (1) of
section 18-A is issued or made;]
(g) “deposit” means the aggregate of the unpaid balances due to a depositor (other than a foreign
Government, the Central Government, a State Government 3
[
4
[ a corresponding new bank or
5
[a Regional Rural Bank or a banking company]] or a co-operative bank]) in respect of all his accounts by
whatever name called, 6
[
7
[ with a corresponding new bank or 8
[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 5
[a Regional Rural Bank or a banking company or a co-operative bank] at the
commencement of this Act 9
[or where an eligible co-operative bank at the commencement of the Deposit
Insurance Corporation (Amendment) Act, 1968 (56 of 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 of the extent it is not credited after to the said date under the provisions of that scheme;
or
10[(ia) any amount due on account of any deposit with any insured bank which has been specially
exempted in this behalf by the Corporation with the previous approval of the Reserve Bank; or]
(ii) any amount due on account of any deposit received outside India;
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[(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 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 therefor for
such period or periods not exceeding 5 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 therefor 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) 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;]
(h) “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 11[the
Banking Regulation Act, 1949 (10 of 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 subsidiary
bank, but does not include a defunct banking company;
1. Subs. by Act 30 of 2021, s. 2, for “in a State.” (w.e.f. 1-9-2021).
2. Ins. by s. 2, ibid. (w.e.f. 1-9-2021).
3. Subs. by Act 56 of 1968, s.3, for “or a banking company” (w.e.f. 1-7-1971).
4. Subs. by Act 5 of 1970, s. 20, for “, a banking company” (w.e.f. 19-7-1969).
5. Subs. by Act 21 of 1976, s. 33, for “a banking company” (w.e.f. 26-9-1975).
6. Subs. by Act 56 of 1968, s. 3, for “with a banking company” (w.e.f. 1-7-1971).
7. Subs. by Act 5 of 1970, s. 20, for “with a banking company” (w.e.f. 19-7-1969).
8. Subs. by Act 21 of 1976, s. 33, for “with a baking company” (w.e.f. 26-9-1975).
9. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
10. Ins. by Act 81 of 1985, s. 5 (w.e.f. 1-5-1986).
11. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971).
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1
[(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 (56 of 1968), which either holds
a licence at such commencement under section 22 of the Banking Regulation Act, 1949 (10 of 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;]
2
[(hha) “Financial institution” means any financial institution within the meaning of clause (c) of
section 451 of the Reserve Bank of India Act, 1934 (2 of 1934);]
3
[(i) “insured bank” means 4
[a banking company],
5
[or a Regional Rural Bank]]
6
[or a
corresponding new 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,—
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[(i) a banking company referred to in clause (a) or clause (b) of sub-section (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 section 13C,]
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 8
[the
Banking Regulation Act, 1949 (10 of 1949)]
9***;
1
[(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
(56 of 1968), under a licence granted to it under section 22 of the Banking Regulation Act, 1949
(10 of 1949), and includes a primary credit society becoming a primary co-operative 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;
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[(ma) “Regional Rural Bank” means a Regional Rural Bank established under section 3 of the
Regional Rural Banks Act, 1976 (21 of 1976);]
(n) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India
Act, 1934 ( 2 of 1934);
(o) “State Bank” means the State Bank of India constituted under the State Bank of India Act,
1955 (23 of 1955);
(p)”subsidiary bank” shall have the meaning assigned to it in section 2 of the State Bank of India
(Subsidiary Banks) Act, 1959 (38 of 1959);
1. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971).
2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
3. Subs. by Act 56 of 1968, s. 3, for clause (i) (w.e.f. 1-7-1971).
4. Subs. by Act 19 of 1988, s. 3 and Second Schedule, for “corresponding new bank or a banking company” (w.e.f. 31-3-1988).
5. Ins. by Act 1 of 1984, s. 56 (w.e.f. 1-7-1971).
6. Ins. by Act 21 of 1976, s. 33 (w.e.f. 26-9-1975).
7. Subs. by s. 56, ibid., for, sub-clause (i) (w.e.f. 19-7-1969).
8. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971).
9. The words and figures “, and includes any banking institution notified under section 51 of the said Act after such
commencement” omitted by Act 1 of 1984, s. 56 (w.e.f. 15-2-1984).
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[(q) the expressions “central co-operative bank, 2*** and “State Co-operative Bank” shall have
the meanings respectively assigned to them in the National Bank for Agriculture and Rural
Development Act, 1981 (61 of 1981);
(r) the expressions 3
[“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 (10 of 1949)].