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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



(1) The Corporation may appoint such number of officers and employees as it considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment and service.

(2) Without prejudice to the provisions of sub-section (1), it shall be lawful for the Corporation to utilise, and for the Reserve Bank to make available, the services of such staff of the Reserve Bank on such terms and conditions as may be agreed upon between the Corporation and the Reserve Bank.



(1) Notwithstanding anything contained in1*[the Banking Regulation Act, 1949] or any other law for the time being in force, the Corporation may at any time direct an insured bank2*[or a credit institution] to furnish to it, within such time as may be specified by the Corporation, such statements and information relating to the deposits in that bank2[or the credit facilities granted by that credit institution, as the case may be,] as the Corporation may consider necessary or expedient to obtain for the purposes of this Act.

(2) The Corporation may, if it considers it expedient and after consulting the Reserve Bank, publish any information obtained by it under the section in such consolidated form as it may think fit.

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1. Substituted by Act 56 of 1958, Section 2.

2. Inserted by Act 21 of 1978, Section. 8(19) (w.e.f. 15-7-78).

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(1) The Corporation shall have free access to all such records of an insured bank1*[or a credit institution] perusal where of may appear to the Corporation to the necessary for the discharge of its functions under this Act.

(2) The Corporation may require any insured bank1*[or credit institution] to furnish to it copies of any of the records referred to in sub-section (1) and the bank1*[or credit institution] shall be bound to comply with the requisition.

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1. Inserted by Act 21 of 1978, Section.8(20) (w.e.f. 15-7-78).

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(1) The Corporation may for any of the purposes of this Act request the Reserve Bank to cause an inspection of the books and accounts or an investigation of the affairs of an insured bank1*[or a credit institution] to be made and on such request the Reserve Bank shall cause such inspection or investigation to be made by one or more of its officers2*[or through such other person or agency as the Reserve Bank may determine.]

(2) The provisions of sub-section (2) of section (3) of section 35 of3*[the Banking Regulation Act, 1949] shall apply to an inspection or investigation under sub-section (1) as they apply to an inspection under that section.

(3) When an inspection or investigation has been made under this section, the Reserve Bank shall furnish a copy of its report to the Corporation and4*[neither the bank nor the credit institution, as the case may be, inspected or investigated, nor any other bank or credit institution] shall be entitled to be furnished with a copy of such report.

(4) Notwithstanding anything contained in any law for the time being in force, no Court, Tribunal or other authority shall compel the production or disclosure of a report under this section or of information or material gathered during the course of an inspection or investigation under this section.

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

2. Inserted by Act 56 of 1968, Section 12.

3. Substituted for "Banking Companies Act, 1949", by Act 56 of 1968, Section 2.

4. Substituted for words "neither the bank inspected or investigated nor any other bank", by Act 21 of 1978, Section. 8(21) (w.e.f. 15-7-78).

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The Corporation shall, one a request in writing from the Reserve Bank, furnish to it within such time as may be specified by the Reserve Bank, such statement and information relating to the business or affairs of the Corporation or of an insured bank as the Reserve Bank may consider necessary or expedient.



The Reserve Bank shall, on a request in writing from the Corporation, furnish to it any report or information relating to an insured bank1*[or a credit instituting] made or obtained by it under or in pursuance of the Reserve Bank of India Act, 1934 or2*[the Banking Regulation Act; 1949.]

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1. Inserted by Act 21 of 1978, Section. 8(22) (w.e.f. 15-7-78).

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

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1*[(1) Every director, auditor, officer or other employee of the Corporation or an employee of the Reserve Bank whose services are utilized by the Corporation under sub-section (2) of section 33 shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule to this Act.

1*[(2) The Corporation shall observe, except as otherwise required by law, the practices and usages customary among the bankers, and, in particular, it shall not divulge any information relating to an insured bank or its customers or a credit institution or its customers except in circumstances in which it is, in accordance with law or practices or usages customary among bankers, necessary or appropriate for the Corporation to divulge such information.

2*(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies (Regulation) Act, 2005.

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1. Section 39 renumbered as sub-section (1), thereof and sub-section (2) inserted by Act 21 of 1978, Section. 8(23) (w.e.f. 15-7-78).

2. Inserted vide Credit Information Companies (Regulation) Act, 2005

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(1) Every director of the Board shall be indemnified by the Corporation against all losses and expenses incurred by him in, or in relation to, the discharge of his duties except such as are caused by his own willful act or default.

(2) A director of the Board shall not be responsible for any other director or for any other officer or other employee of the Corporation, or for any loss or expenses resulting to the Corporation from the insufficiency or deficiency of value of or title to any property or security acquired or taken on behalf of the Corporation or the insolvency or wrongful act of any debtor or any person under obligation to the Corporation or anything done in good faith in the execution of the duties of his office or in relation thereto.



(1) No act or proceedings of the Board or of any committee of the Corporation shall be questioned on the ground merely of the existence of any vacancy or defect in the constitution of the Board or committee.

(2) No act done by any person acting in good faith as a director of the Board shall be deemed to be invalid merely on the ground that he was disqualified to be director or that there was any other defect in his appointment.



No suit other legal proceeding shall lie against the Corporation or the Reserve Bank or any director of the Board or any officer of the Corporation or the Reserve Bank or1*[or any other person or agency authorised by the Corporation or the Reserve Bank] to discharge any functions under this Act for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act.

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1. Substituted for the words "or any other person authorised by the Corporation" by Act 56 of 1968, Section 13.

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Nothing in the Companies Act, 1956 or the Insurance Act, 1938, shall apply to the Corporation.



(1) The Corporation shall not be placed in liquidation save by order of the Central Government and in such manner as that Government may direct.

(2) On the liquidation of the Corporation-

(a) The outstanding assets of the Corporation in so far as they relate to the Deposit Insurance Fund shall be distributed among the insured banks in such manner and in such proportion as may be determined by the Central Government having regard to the amounts of premium paid by them during any prescribed period or the deposits of the said banks as on the date of liquidation of the Corporation or other relevant circumstances;

(b) The remaining outstanding assets of the Corporation shall be transferred to the Reserve Bank.



In the discharge of its functions under this Act, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may after consulting the Reserve Bank give to it in writing, and if any question arises whether the directions relate to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.



Any dispute as to the amount of premium due from any insured bank shall be decided by the Central Government and the decision of that Government shall final.



(1) Whoever in any return, balance-sheet or other document or in any information required or furnished by or under or for the purposes of any provision of this Act, willfully makes a statement which is false in any material particular, knowing it to be false, or willfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.

(2) If any person fails to produce any book, account or other document or to furnish any statement or information which, under the provisions of this Act, it is his duty to produce or furnish, he shall be punishable with a fine which may extend to two thousand rupees in respect of each offence and in the case of a continuing failure, with an additional fine which may extend to one hundred rupees for every day during which the failure continues after conviction for the first such failure.



(1) Where an offence has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any gross negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.- For the purposes of this section-

(a) "Company" means any body corporate and includes1*[a co-operative society or] a firm or other association of individuals; and

(b) "Director" in relation to a firm, means a partner in the firm a and in relation to a co-operative society includes any member of a committee of management or other managing body (by whatever name called) to which the management of the affairs of the bank is entrusted.]

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1. Inserted by Act 56 of 1968, Section 14.

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(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, no Court shall take cognizance of any offence punishable under this Act except upon a complain, in writing, made by an officer of the Corporation, generally or specially authorised in writing in this behalf by the Board, and no Court, inferior to the Court of a Metropolitan Magistrate or a Judicial Magistrate of the first class, shall try any such offence.

(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, a Magistrate may, if he sees reason so to d, dispense with the personal attendance of the officer of the Corporation filing the complaint, but the Magistrate may, in his discretion, at any stage of the proceeding, direct the personal attendance of the complainant.]

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1. Substituted by Act 21 of 1978, Section.8(24) (w.e.f. 15-7-78).

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(1) The Board may, with the previous approval of the Reserve Bank,1*[by notification in the Official Gazette,] make regulations not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for-

(a) The times and places of the meetings of the Board or of any committee constituted under this Act and the procedure to be followed at such meeting including the quorum necessary for the transaction of business;

(b) The number of directors constituting an Executive Committee, and the functions that such committees shall discharge;

(c) The functions which any other committee may discharge under this Act;

(d) The fees and allowances that may be paid to the members of a committee other than directors of the Board;

(e) The fees and allowances that may be paid to the directors of the Board;

(f) The periods for which, the times at which and the manner in which premium may be paid by an insured bank;

(g) The interest which may be charged from an insured bank where it makes default in payment of premium;

(h) The manner in which and the time within which the amounts referred to in section 21 may be paid;

(i) The form and the manner in which the balance-sheet and the account of the Corporation shall be prepared or maintained; and

(j) Any other matter which is to be, or may be, prescribed.

(3) Any regulation which may be made by the Board under this Acct may be made by the Reserve Bank within three months of the establishment of the Corporation; and any regulation so made may be altered or rescinded by the Board in the exercise of its powers under this Act.

2*[(4) Every regulation shall, as soon as may be after it is made under this Act by the Board, be forwarded to the Central Government and that Government shall cause a copy of the same to be laid before each House of Parliament, 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 sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the regulation, or both Houses agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that regulation.]

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1. Inserted by Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act (66 of 1988), Section. 26, (w.e.f. 30-12-88).

2. Inserted by Banking Laws (Amendment) Act (1 of 1984), Section. 64 (w.e.f. 15-2-84).

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Repealed by the Repealing and Amending Act, 1964 (52 of 1964), Section 2 and Schedule I.

Schedule 1

THE FIRST SCHEDULE
(See Section 39)

Declaration of Fidelity and Secrecy

I do hereby declare that I will faithfully, truly and to the best of my skill and ability execute and perform the duties required of me as director, auditor, officer or other employee (as the case may be) of the1eposit Insurance and credit guarantee Corporation] and which properly relate to the office or position filed by me in the said Corporation.

I further declare that I will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the  1*[Deposit Insurance and credit guarantee Corporation] or to the affairs of any person having any dealing with the said Corporation; nor will I allow any such person to inspect or have access to any books or document belonging to or in the possession of the  1*[Deposit Insurance and Credit Guarantee Corporation] and relating to the business of the said Corporation or the business of any person having any dealing with the said Corporation

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1.  Substituted for the words "Deposit Insurance Corporation" by Act 21 of 1978, Section. 8(25) (15-7-78)

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Last updated on July, 2016

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