Deposits in a bank in India are insured by the DICGC up to what amount for each depositor in each bank?

The correct answer is C, rupees five lakh. The Deposit Insurance and Credit Guarantee Corporation, a wholly owned subsidiary of the Reserve Bank of India set up in 1978, insures deposits in commercial banks, regional rural banks, local area banks, payments and small finance banks and cooperative banks. The cover applies to each depositor in each bank, taking principal and interest together, and the same limit applies whether the depositor holds one account or several in that bank. The premium is paid by the bank and never charged to the customer.

Option A, one lakh, was the limit for many years before it was raised, so it is the commonest wrong answer. Option B, two lakh, is not a deposit insurance figure at all. Option D, ten lakh, is higher than the present cover. Deposits in different banks are separately insured, which is why spreading large savings across banks increases the protected amount.