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THE DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION ACT, 1961

Title : THE DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION ACT, 1961

Year : 1961

[Act, No. 47 of 1961]1*
[7th December, 1961]


PREAMBLE

An Act to provide for the establishment of a corporation for the purpose of insurance of deposits2[and guaranteeing of credit facilities] and for other matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Twelth Year of the Republic of India as follows:-

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1. Inserted by Act 21 of 1978. Section. 8(1).

2. Inserted by Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act 21 of 1978, Section.

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(1) This Act may be called1*[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 date2*as the Central Government may, by notification in the Official Gazette, appoint.

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1. Substituted for words "the Deposit Insurance Corporation" by Act 21 of 1978, Section. 8(2) (w.e.f.15-7-78).

2. The Act came into force on 1-1-1962, sec G.S.R. 18, dated 28-12-1961, Gazette of India, 1962, Pt. II, Section. 3(i) p.7.

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In this Act, unless the context otherwise requires,-

(a)"Banking" means the accepting for the purpose of leading 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 1 [and a subsidiary bank] but does not include the 2 [Tamil Nadu Industrial Investment Corporation Limited];

Explanation:-Any company which is engaged in the manufactured of foods 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 the clause;
(a)"Board" means the Board of Directors constituted under section 6;

(d)"Company" means any company as defined in section 3 of the Companies Act, 1956 and includes a foreign company within the meaning of section 561 of that Act;

3*[(dd) "Co-operative bank" means a State co-operative bank, a Central co-operative bank and a primary co-operative bank;]

(e)"Corporation" means 4*[the Deposit Insurance and Credit Guarantee Corporation] established under section 3;

5*[(ee) "Corresponding new bank" means a corresponding new bank constituted under section 3 of the Banking companies (acquisition and Transfer of Undertakings) Act, 1970 or, as the case may be, under section 3 of the Banking companies (Acquisition and Transfer of Undertakings) Act, 1980;]

6*[(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" 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 section36A of 7*[the Banking Regulation Act, 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 competent Court;

8*[(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 direct 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; 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

(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 a force in a State.]

(g) "Deposit" means the aggregate of the unpaid balances due to a depositor (other than a foreign Government, the Central Government, a State Government, 9*[a corresponding new bank 10* [or a Regional Rural Bank or a banking company or a co-operative bank] in respect of all his accounts by whatever name called, 11* [with a corresponding new bank or10*[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) 11*[Where a banking company 13*[or a Regional Rural Bank] or a corresponding new bank] at the commencement of this Act 12* [or where an eligible co-operative bank at the commencement of the Deposit Insurance Corporation (Amendment) Act, 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 the aid date under the provisions of that scheme; or

(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;

14*[(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 circumstances referred to in section 13-D;

(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 therefore 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 therefore 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 alicence at such commencement under section 22 of 15* [the Banking Regulation Act, 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;

16*[(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, which either holds alicence at such commencement under section 22 of the Banking Regulation Act,1949, or having applied for such lience 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;]

17*[(hha) " Financial institution" means any financial institution within the meaning of clause (c) of section 451 of the Reserve Bank of India Act, 1934;]

18*[(i) "Insured bank" means a 20*[a banking company] 21*[or a Regional Rural Bank]] 19*[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 section 16, 17, 18 and 21,-

22*[(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]

(iii) A co-operative bank referred to in clause (a) or clause (b) of section 13-C;] the registration whereof has been cancelled under section 13, or, as the case maybe, under section 13-C;]

(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 beings to transact the business of banking after the commencement of this Act under a licence granted to it under section 22 23*[the Banking Regulation Act, 1949] 24[***];

25*[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, under a licence granted to it under 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 15of this Act;

(m)"Prescribed" means prescribed by regulations made under this Act;

26*[(ma) "Regional Rural Bank" means a Regional Rural Bank established under section 3 of the Regional Rural Banks Act, 1976;]

(n)"Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934;

(o) "State Bank" means the State Bank of India constituted under the State Bank of India Act, 1955;

(p)"Subsidiary bank" shall have the meaning assigned to it in section 2of the State Bank of India (Subsidiary Banks) Act, 1959;

27*[(q) The expressions "Central Co-operative Bank, 28[***] and "State Co-operative Bank" shall have the meanings respectively assigned to them in the National Bank for Agriculture and Rural Development Act, 1981;

(r) The expressions 29*["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].

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1.Substituted for the words. "a subsidiary bank and any other banking institution notified under Section 51 of the Banking Regulation Act,1949" by Banking Laws (Amendment) Act (1 of 1984), Section 56 (w.e.f.15-2-1984).

2.Substituted for words "Madras Industrial Investment Corporation Limited" by Repealing and Amending Act (56 of 1974), Section 3 2ndSch.

3. Inserted by Act56 of 1968. Section 2(i).

4.Substituted for words "the deposit Insurance Corporation" by Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act 21 of 1978, Section 8(3)(i) (w.e.f. 15-7-78).

5.Substituted by Banking Laws (Amendment) Act (1 of 1984), Section 56(w.e.f. 15-2-1984).

6.Inserted by Deposit Insurance Corporations (Amendment and Miscellaneous Provisions) Act 21 of 1978, Section 8(3) (i) (w.e.f. 18-7-8).

7.Substituted by Act 56 of 1968, Section 2.

8.Inserted by Act 56 of 1968, Section 3(ii)

9.Substituted for "with a banking company" by Act 5 of1970, Section 20(4).

10.Substituted by Act 56 of 1968, Section 3(iii)

11.Substituted by Act 5 of 1970, Section 20(4)(a)(ii) (w.r.e.f.19-7-1969).

12.Substituted by Act 56 of 1968, Section 3(iii)(c).

13.Substituted for words "a banking company" and "with a banking company" by Act 21 of 1976, Section 33(5) (w.e.f. 26-9-75).

14.Inserted by Act 56 of 1968, Section 3(iv).

15.Substituted by Act 56 of 1968, Section 2.

16.Inserted by Act 56 of 1968, Section 3(v).

17.Inserted by Act 21 of 1978, Section 8(3) (iii)(15-7-1978)

18.Substituted for original clause (i) by Act 56 of 1968, Section3(vi).

19.Inserted by Act 5 of 1970, Section 20(4)(a)(iii)(w.r.e.f.19-7-1969).

20.Substituted for words "corresponding new bank of a banking company" by Repealing and Amending Act (19 of 1988) Section 3 (w.e.f. 31-3-88).

21.Inserted by Act 21 of 1976, Section 33 (5) (26-9-75).

22.Substituted for sub-clause (i) by Banking Laws (Amendment) Act (1of 1984), Section 56 (w.r.e.f 19-7-69).

23.Substituted by Act 56 of 1968, Section 2.

24. Words, "and includes any banking institution notified under section 51 of the said Act after such commencement" omitted by Banking Laws (Amendment) Act (1 of 1984), Section 56 (w.e.f. 15-2-84).

25.Inserted by Act 56 of 1968, Section 3 (vii).

26.Inserted by Act 21 of 1976, Section 33(5) (w.e.f. 26-9-75)
27.Clause (q) substituted by National Bank for Agriculture and Rural Development Act (61 of 1981).

28. Omitted by Act No. 24 of 2004.

29. Inserted by Act No. 24 of 2004.

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Last updated on July, 2016

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