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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



The Corporation shall maintain three funds to be called respectively the Deposit Insurance Fund, the Credit Guarantee Fund and the General Fund.]

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1. Substituted by Act 21 of 1978, Section. 8(10) (w.e.f. 15-7-78).

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(1) To the Deposit Insurance Fund shall be credited-

(a) All amounts received by the Corporation as premium;

(b) All amount received by the Corporation under section 21;

(c) The amount advanced by the Reserve Bank under section 26;

(d) All amounts transferred to that Fund from the General Fund 1* [or the Credit Guarantee Fund] under section 27; and

(e) All income arising from the investments made out of that Fund.

(2) The said Fund shall be applied-

(a) To make payments in respect of insured deposits;

(b) To meet liability in respect of an advance taken under section 26, [* *]2*

(c) To meet liability in respect of the amounts referred to in clause (d) of sub-section (1); [and]2*

(d) To meet the whole or any part of the liability on account of the depreciation in assets, contributions to staff superannuation and other funds or other expenses incurred or to be incurred by the Corporation, as may be decided by the Board.]

23A -1* Credit Guarantee Fund

(1) To the Credit Guarantee Fund shall be credited,-

(a) All amounts in the Reserve for unexpired Clearance Right maintained by the Credit Guarantee Corporation of India Limited, a company formed and registered under the Companies Act, 1956, and having its registered office at Bombay;

(b) All amounts received by the Corporation as fees for guarantees and indemnities taken over or given by it;

(c) All amounts received by the Corporation in respect of guarantees and indemnities taken over or given by it;

(d) All amounts transferred to that Fund from the Deposit Insurance Fund or the General Fund under section 27; and

(e) All income arising from the investments made out of that fund.
(2) The said Fund shall be applied-

(a) To make payments in respect of guarantees and indemnities taken over or issued by the Corporation;

(b) To meet any liability in respect of the amount referred to in clause (d) of sub-section (1);

(c) To meet the whole or any part of the liability on account of depreciation in assets, contributions to staff superannuation and other funds, or other expenses incurred or to be incurred by the Corporation, as may be decided by the Board;]

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1. Inserted by Act 21 of 1978, Section. 8(12) (w.e.f. 15-7-98).

2. Word "and" at the end of clause (b) omitted and inserted at the end of cl. (c) & Cl. (d) inserted thereafter ibid, Section. 8(11) (w.e.f. 15-7-1979).

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All receipts of the Corporation other than those referred to in sub-section (1) of section 23 1*[or in sub-section (1) of section 23A] shall be credited to the General Fund and all payments by the Corporation other than those referred to in sub-section (2) 2*[of section 23, or as the case may be, sub-section (2) of section 23A] shall be made out of that Fund.

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1. Inserted by Act 21 of 1978, Section. 8(13) (w.e.f. 15-7-98).

2. Substituted for words "of that section", by Act 21 of 1978, Section. 8(13) (w.e.f. 15-7-98).

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All moneys belonging to the Deposit Insurance Fund1*[or the Credit Guarantee Fund] or the General Fund which may not for the time being be required by the Corporation shall be invested in promissory notes, stock or securities of the Central Government and all moneys shall be deposited with the Reserve Bank.

25A -1* Amount In One Fund May Be Transferred To The Other Fund Or May Be Utilised For Other Purposes

Notwithstanding anything contained in this Act, the Board may-

(a) Transfer any amount from the Deposit Insurance Fund to the Credit Guarantee Fund or from the Credit Guarantee fund to the Deposit Insurance Fund, or

(b) Utilise any money standing to the credit of either of the said Funds for such purposes as it may think fit, if it is satisfied that the balance in the Fund, after such transfer or utilization, will be adequate to meet any probable claim on that Fund.]

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1. Inserted by Act 21 of 1978, Section. 8(15) (w.e.f 15-7-78).

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(1) The Reserve Bank shall, from time to time, advance to the Corporation on a request by it such sum or sums as may be required by the Corporation for the purposes of the Deposit Insurance Fund1*[or the Credit Guarantee Fund]:

Provided that the total amount outstanding at any one time on account of such advances shall not exceed five crores of rupees.

(2) The terms and conditions of any advance under this section shall be such as may be determined by the Reserve Bank with the approval of the Central Government.

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1. Inserted by Act 21 of 1978, Section. 8(16) (w.e.f. 15-7-78).

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If, at any time, the amount available in the Deposit Insurance Fund or the Credit Guarantee Fund is insufficient to meet the requirements of that Fund, the Corporation may transfer, on such terms and for such period as may be determined by the Board with the approval of the Reserve Bank, from any of the other two Funds, referred to in section 22 such amount as may be necessary to meet the requirements of the Deposit Insurance Fund or the Credit Guarantee Fund, as the case may be.

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1. Substituted by Act 21 of 1978, Section. 8(17) (w.e.f. 15-7-78).

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(1) The balance-sheet and accounts of the Corporation shall be prepared and maintained in such form and manner as may be prescribed.

(2) The Board shall cause the books and accounts of the Corporation to be balanced and closed as on the 31st day of December1*[or such other date in each year as the Central Government may, by notification in the Official Gazette, specify"]

2*[Provided that with a view to facilitating the transaction from one period of accounting to another period of accounting under this sub-section, the Central Government may, by order published in the Official Gazette, make such provision as it considers necessary or expedient for the balancing and closing of, or for other matters relating to the books or accounts in respect of the concerned years.]

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1. Substituted for the words "each year" by the Banking, Public financial Institution and Negotiable Instruments Laws (Amendment) Act (66 of 1988), section. 25 (w.e.f. 30-12-1988).

2. Inserted, by the Banking, Public financial Institution and Negotiable Instruments Laws (Amendment) Act (66 of 1988), Section. 25 (w.e.f. 30-12-1988).

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2*[(1) Notwithstanding anything contained in the Indian Income-tax Act, 1961, the Corporation shall not be liable to pay any tax under that Act on any of its incoming profits or gains for the accounting year during which the Corporation is established and for 3 [fourteen accounting years.]

2*[(2) Notwithstanding anything contained in the Income-tax Act, 1961, the Corporation shall not be liable to pay any tax under that Act on any of its income, profits or gains for the period commencing from the first day of January, 1977, and ending with the commencement of the accounting year during which Chapter II of the Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act, 1978, comes into force and for four accounting years following that years.]

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1. Substituted for section 30 by Finance Act (20 of 1967) Section 44 (w.e.f. -4-1967).

2. Section 30 renumbered as sub-section (1) thereof, and after sub-section so renumbered sub-section (2) inserted by Act 21 of 1978, Section. 8(18) (w.e.f. 15-7-78).

3. Substituted for words "nine accounting years" by Finance Act (32 of 1971), Section. 53 (w.e.f. 1-4-71).

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After making provisions for all its liabilities and for all other matters for which provision is necessary or expedient, including any contribution to the staff and super annuation funds, the Corporation shall transfer the balance, if any, of its income in its General Fund to one or more reserve funds to be utilised in such manner and for such purposes as the Corporation may deem fit.



(1) The Corporation shall furnish to the Reserve Bank within three months from the date on which its accounts are balanced and closed the balance-sheet and accounts together with the auditor's report and a report of the working of the Corporation during the year and copies of the said balance-sheet and accounts and reports shall be furnished by the Corporation to the Central Government.

(2) The Central Government shall cause every auditor's report and report of the working of the Corporation to be laid1*[as soon as may be after they received before each House of Parliament2[* * *]].

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1. Substituted for the word "for not less tan thirty days before each House of Parliament as soon as may be after each such report is received by the Central Government" by Banking Laws (Amendment) Act (1 of 1984), Section. 63 (w.e.f. 15-2-84).

2. Words", while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sections" as substituted by Act (1 of 1984), omitted by Banking Laws (Amendment) Act (81 of 1985), Section. 6 (w.e.f. 15-86).

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Last updated on July, 2016

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