The Deposit Insurance and Credit Guarantee Corporation Act, 1961

(1) This Act may be called 1[the Deposit Insurance andCredit Guarantee Corporation] Act, 1961. (2) It extend to the whole of India. (3) It shall come into force on such date2as the Central Government may, by notification in theOfficial Gazette, appoint.

In this Act, unless the context otherwise requires,-- (a) banking means the accepting for the purpose of lending or investment, of deposits of moneyfrom the public repayable on demand or otherwise, and withdrawable by cheque, draft, order orotherwise; (b) banking company means any company which transacts the business of banking in India andincludes the State Bank 1[and a subsidiary bank], but does not include the 2[Tamil Nadu IndustrialInvestment Corporation Limited]. Explanation.--Any company which is engaged in the manufacture of goods or carries on anytrade and which accepts deposits of money from the public merely for the purpose of financing itsbusiness as such manufacturer or trader shall not be deemed to transact the business of bankingwithin 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) andincludes a foreign company within the meaning of section 591 of that Act; 3[(dd) co-operative bank means a State co-operative bank, a Central co-operative bank and aprimary co-operative bank;] (e) Corporation means 4[the Deposit Insurance and Credit Guarantee Corporation] establishedunder section 3; 5[(ee) corresponding new bank means a corresponding new bank constituted under section 3 ofthe Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or, as thecase may be, under section 3 of the Banking companies (Acquisition and Transfer of Undertakings)Act, 1980 (40 of 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 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) ofsection 36A of 7[the Banking Regulation Act, 1949 (10 of 1949)], or has converted itself into anon-banking company; or (v) in respect of which a liquidator has been appointed in pursuance of a resolution for thevoluntary winding up of its affairs; or (vi) in respect of which any scheme of compromise or arrangement or of reconstruction hasbeen sanctioned by any competent authority and the said scheme does not permit the acceptance offresh 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 a8[competent Court; or] 9[(ix) in respect of which any direction, prohibition, order or scheme referred to in sub-section (1) of section 18A is issued or made;] 10[(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) ofsection 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 hasbeen sanctioned under any law for the time being in force and such scheme does not permit theacceptance 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 ofCo-operative Societies or other competent authority under any law relating to co-operativesocieties for the time being in force 11[in a State;or] 12[(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 foreignGovernment, the Central Government, a State Government 13[ 14[ a corresponding new bank or15[a Regional Rural Bank or a banking company]] or a co-operative bank]) in respect of all hisaccounts by whatever name called, 16[ 17[ with a corresponding new bank or 18[with a Regional RuralBank or with a banking company]] or a co-operative bank] and includes credit balances in any cashcredit account but does not include,-- (i) where 15[a Regional Rural Bank or a banking company or a co-operative bank] at thecommencement of this Act 19[or where an eligible co-operative bank at the commencement of theDeposit Insurance Corporation (Amendment) Act, 1968 (56 of 1968)] is working under a schemeof compromise or arrangement or of reconstruction sanctioned by any competent authorityproviding for the acceptance of fresh deposits any amount due to the depositor in respect of hisdeposit before the date of the coming into force of the scheme of the extent it is not credited afterto the said date under the provisions of that scheme; or 20[(ia) any amount due on account of any deposit with any insured bank which has beenspecially exempted in this behalf by the Corporation with the previous approval of the ReserveBank; or] (ii) any amount due on account of any deposit received outside India; 19[(gg) eligible co-operative bank means a co-operative bank the law for the time beinggoverning which provides that-- (i) an order for the winding up, or an order sanctioning a scheme of compromise orarrangement or of amalgamation or reconstruction, of the bank may be made only with theprevious 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 Bankin the circumstances referred to in section 13D; (iii) if so required by the Reserve bank in public interest or for preventing the affairs of thebank being conducted in a manner detrimental to the interests of the depositors or for securing theproper management of the bank, an order shall be made for the supersession of the committee ofmanagement or other managing body (by whatever name called) of the bank and the appointmentof an administrator therefor for such period or periods not exceeding 5 years in the aggregate asmay 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 compromiseor arrangement or of amalgamation or reconstruction or an order for the supersession of thecommittee of management or other managing body (by whatever name called) of the bank andthe appointment of an administrator therefor made with the previous sanction in writing or on therequisition 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 beunder an obligation to repay the Corporation in the circumstances to the extent and in the mannerreferred to in section 21;] (h) existing banking company means a banking company carrying on the business of banking atthe commencement of this Act which either holds a licence at such commencement under section 22of 21[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 includesthe State Bank and subsidiary bank, but does not include a defunct banking company; 22[(hh) existing co-operative bank means a co-operative bank carrying on the business ofbanking 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 BankingRegulation Act, 1949 (10 of 1949), or having applied for such licence has not been informed bynotice in writing by the Reserve Bank that a licence cannot be granted to it but does not include adefunct co-operative bank;] 23[(hha) Financial institution means any financial institution within the meaning of clause (c) ofsection 451 of the Reserve Bank of India Act, 1934 (2 of 1934);] 24[(i) insured bank means 25[a banking company],26[or a Regional Rural Bank]]27[or acorresponding new bank] or an eligible co-operative bank for the time being registered under theprovisions of this Act and includes for the purposes of sections 16, 17, 18 and 21,-- 28[(i) a banking company referred to in clause (a) or clause (b) of sub-section (1) ofsection 13, or (ia) a corresponding new bank to which the provisions of clause (a) of sub-section (1) ofsection 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 section13C;] (j)insured deposit means the deposit or any portion thereof the repayment whereof is insured bythe Corporation under the provisions of this Act; (k) new banking company means a banking company which begins to transact the business ofbanking after the commencement of this Act under a licence granted to it under section 22 29[theBanking Regulation Act, 1949 (10 of 1949)] 30***; 22[(kk)] new co-operative bank means a co-operative bank which begins to transact the businessof 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 suchcommencement;] (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; 27[(ma) Regional Rural Bank means a Regional Rural Bank established under section 3 of theRegional Rural Banks Act, 1976 (21 of 1976);] (n) Reserve Bank means the Reserve Bank of India constituted under the Reserve Bank of IndiaAct, 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); 31[(q) the expressions central co-operative bank, 32*** and State Co-operative Bank shall havethe meanings respectively assigned to them in the National Bank for Agriculture and RuralDevelopment Act, 1981 (61 of 1981); (r) the expressions 33[co-operative society, primary co-operative bank] and primary creditsociety shall have the meanings respectively, assigned to them in Part V of the Banking RegulationAct, 1949 (10 of 1949)].

(1) The CentralGovernment shall, by notification in the Official Gazette, establish a Corporation by the name of theDeposit Insurance Corporation which shall be a body corporate having perpetual succession and acommon seal with power, subject to the provisions of this Act, to acquire, hold or dispose of property andto contract, and may, by the said name, sue or be sued. 1[1A) Any reference in this Act to the Deposit Insurance Corporation shall, on and from the date onwhich Chapter II of the Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act,1978 (21 of 1978), comes into force, be construed as a reference to the Deposit Insurance and CreditGuarantee Corporation.] (2) The head office of the Corporation shall be at Bombay, but it may, with the previous sanction ofthe Reserve Bank, establish branches or agencies in any other place in India.

1[4. Capital of Corporation.--(1) The authorised capital of the Corporation shall be one crore ofrupees but the Central Government may, in consultation with the Reserve Bank, increase such capitalfrom time to time, so, however, that the total authorised capital shall not exceed2[fifty crores of rupees]. (2) The 3[issued capital] for the time being of the Corporation shall be fully paid-up and shall standallotted to the Reserve Bank.]

The general superintendence, direction and the management ofthe affairs and business of the Corporation shall vest in a Board of directors which may exercise allpowers and do all acts and things which may be exercised or done by the Corporation.