THE DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION ACT, 1961 
________ 

ARRANGEMENT OF SECTIONS 
________ 

CHAPTER I 

PRELIMINARY 

SECTIONS 

1.  Short title, extent and commencement. 
2.  Definition. 

ESTABLISHMENT AND MANGEMENT OF THE DEPOSIT INSURANCE CORPORATION 

CHAPTER II 

3.  Establishment and incorporation of Deposit Insurance Corporation. 
4.  Capital of Corporation. 
5.  Management of Corporation. 
6.  Board of directors. 
7.  Meetings of Board. 
8.  Committees of Corporation. 
9.  Fees and allowances of directors. 

CHAPTER III 

REGISTRATION OF BANKING COMPANIES AND CO-OPERATIVE BANKS AS INSURED BANKS AND LIABILITY OF 
CORPORATION TO DEPOITORS 

10.  Registration of existing banking companies. 
11.  Registration of new banking companies. 
11A. Registration of Regional Rural Banks. 
12.  Registration of defunct banking companies. 
13.  Cancellation of registration. 
13A. Registration of co-operative banks. 
13B. Registration of defunct co-operative banks. 
13C. Cancellation of registration of co-operative banks. 
13D. Circumstances in which Reserve Bank may require winding up of co-operative banks. 
14.  Intimation of registration. 
15.  Premium. 
15A. Cancellation of registration of an insured bank for non-payment of premium. 
16.  Liability of Corporation in respect of insured deposits. 
17.  Manner of payment by Corporation in case of winding up of insured banks. 
18.  Manner  of  payment  by  corporation  in  case  of  scheme  of  compromise  or  arrangement  or  of 

reconstruction or amalgamation in respect of an insured bank. 

19.  Discharge of the liability of Corporation. 
20.  Provision for unpaid amounts. 
21.  Repayment of the amount to corporation. 

21A. Guaranteeing of credit facilities and indemnifying credit institutions. 
21B. Corporation to act as agent of Central Government. 

CHAPTER IIIA 
CREDIT GUARANTEE FUNCTIONS 

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CHAPTER IV 

FUNDS, ACCOUNTS AND AUDIT 

SECTIONS 

22.  Funds of Corporation. 
23.  Deposit Insurance Fund. 
23A. Credit Guarantee Fund. 
24.  General Fund. 
25.  Investment. 
25A. Amount in one fund may be transferred to the other fund or may be utilised for other purposes. 
26.  Advances by Reserve Bank. 
27.  Advances from General Fund to the Deposit Insurance Fund or Credit Guarantee Fund. 
28.  Preparation of balance-sheet, etc., by corporation. 
29.  Audit. 
30.  Income-tax. 
31.  Reserve Fund. 
32.  Annual accounts and reports. 

CHAPTER V 

MISCELLANEOUS 

33.  Staff of Corporation. 
34.  Returns from insured banks. 
35.  Corporation to have access to records. 
36.  Inspection of insured banks by Reserve Bank. 
37.  Corporation to furnish information to Reserve Bank. 
38.  Reserve Bank to furnish information to Corporation. 
39.  Declaration of fidelity and secrecy. 
40.  Indemnity of directors. 
41.  Defects in appointment not to invalidate acts, etc. 
42.  Protection of action taken under this act. 
43.  Companies Act, 1956 and insurance act, 1938 not to apply. 
43A. Powers of Reserve Bank not to apply to International Financial Services Centre. 
44.  Liquidation of Corporation. 
45.  Power of Central Government to give directions. 
46.  Dispute as to amount of premium. 
47.  Penalties. 
48.  Offences by companies. 
49.  Cognizance and trial of offences. 
50.  Regulation. 
51.  [Repealed.] 

THE FIRST SCHEDULE. 
THE SECOND SCHEDULE [REPEALED]. 

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THE DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION ACT, 1961 

ACT NO. 47 OF 19611 

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

BE it enacted by Parliament in the Twelfth Year of the Republic of India as follows:—    

[7th December, 1961.] 

CHAPTER I 

PRELIMINARY 

1. Short title, extent and commencement.—(1) This Act may be called 3[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  date4  as  the  Central  Government  may,  by  notification  in  the 

Official Gazette, appoint. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “banking” means the accepting for the purpose of lending 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 5[and  a  subsidiary  bank],  but  does  not  include  the 6[Tamil  Nadu  Industrial 
Investment Corporation Limited]. 

Explanation.—Any company which is engaged in the manufacture of goods 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 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) and 

includes a foreign company within the meaning of section 591 of that Act; 

7[(dd)  “co-operative  bank”  means  a  State  co-operative  bank,  a  Central  co-operative  bank  and  a 

primary co-operative bank;] 

(e) “Corporation” means 2[the Deposit Insurance and Credit Guarantee Corporation] established 

under section 3; 

1.The  Act  has  been  extended  to  Goa,  Daman  and  Diu  (with  modifications)  by  Reg.  12  of  1962,  s.  3  and  Schedule                       

(w.e.f. 1-2-1965) and to Pondicherry by Reg. 7 of 1963, s. 3 and First Schedule. 

2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
3. Subs. by s. 8, ibid., for “the Deposit Insurance Corporation” (w.e.f. 15-7-1978). 
4. 1st January, 1962, vide notification No. G.S.R. 18, dated 28th December, 1961, see Gazette of India, Part II, sec. 3(i). 
5.  Subs.  by  Act  1  of  1984,  s.  56,  for  “,  a  subsidiary  bank  and  any  other  banking  institution  notified  under  section  51  of  the 

Banking Regulation Act, 1949 (10 of 1949)” (w.e.f. 15-2-1984). 

6.  Subs.  by  Act  56  of  1974,  s.  3  and  the  Second  Schedule,  for  “Madras  Industrial  Investment  Corporation  Limited”                    

(w.e.f. 20-12-1974). 

7.  Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971). 

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1[(ee) “corresponding new bank” means a corresponding new bank constituted under section 3 of 
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or, as the 
case may be, under section 3 of the Banking companies (Acquisition and Transfer of Undertakings) 
Act, 1980 (40 of 1980);] 

2[(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)  of 
section  36A  of 3[the  Banking  Regulation  Act,  1949  (10  of  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; 

4[(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)  of 

section 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 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 force in a State.] 

1. Subs. by Act 1 of 1984, s. 56, for sub-clause (ee) (w.e.f. 15-2-1984). 
2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
3. Subs. by Act 56 of 1968, s.2, for “the Banking companies Act, 1949 (10 of 1949),” (w.e.f. 1-7-1971). 
4. Ins. by s. 3, ibid. (w.e.f. 1-7-1971). 

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(g) “deposit” means the aggregate of the unpaid balances due to a depositor (other than a foreign 
Government,  the  Central  Government,  a  State  Government  1[  2[  a  corresponding  new  bank  or  
3[a  Regional  Rural  Bank  or  a  banking  company]]  or  a  co-operative  bank])  in  respect  of  all  his 
accounts by whatever name called, 4[   5[ with a corresponding new bank or  6[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)   where  3[a  Regional  Rural  Bank  or  a  banking  company  or  a  co-operative  bank]  at  the 
commencement of this Act 7[or where an eligible co-operative bank at the commencement of the 
Deposit Insurance Corporation (Amendment) Act, 1968 (56 of 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 
to the said date under the provisions of that scheme; or 

8[(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; 

7[(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 the circumstances referred to in section 13D; 

(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 therefor 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 therefor 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 a licence at such commencement under section 22 
of 9[the Banking Regulation Act, 1949 (10 of 1949)] or having applied for such licence has not been 

1. Subs. by Act 56 of 1968, s.3, for “or a banking company” (w.e.f. 1-7-1971). 
2. Subs. by Act 5 of 1970, s. 20, for “, a banking company” (w.e.f. 19-7-1969). 
3. Subs. by Act 21 of 1976, s. 33, for “a banking company” (w.e.f. 26-9-1975). 
4. Subs. by Act 56 of 1968, s. 3, for “with a banking company” (w.e.f. 1-7-1971). 
5. Subs. by Act 5 of 1970, s. 20, for “with a banking company” (w.e.f. 19-7-1969). 
6. Subs. by Act 21 of 1976, s. 33, for “with a baking company” (w.e.f. 26-9-1975). 
7. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971). 
8. Ins. by Act 81 of 1985, s. 5 (w.e.f. 1-5-1986). 
9. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971). 

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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; 

1[(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                  
(56 of 1968), which either holds a licence at such commencement under section 22 of 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 but  does  not  include  a 
defunct co-operative bank;] 

 2[(hha) “Financial institution” means any financial institution within the meaning of clause (c) of 

section 451 of the Reserve Bank of India Act, 1934 (2 of 1934);] 

3[(i)  “insured  bank”  means 4[a  banking  company], 5[or  a  Regional  Rural  Bank]]   6[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 sections 16, 17, 18 and 21,—    

7[(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] 

(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  section          
13C;] 

(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 begins to transact the business of 
banking  after  the  commencement  of  this  Act  under  a  licence  granted  to  it  under  section  22   8[the 
Banking Regulation Act, 1949 (10 of 1949)]  9***; 

1[(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 
(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 such 
commencement;] 

(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; 

6[(ma) “Regional Rural Bank” means a Regional Rural Bank established under section 3 of the 

Regional Rural Banks Act, 1976 (21 of 1976);] 

(n) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India 

Act, 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); 

1. Ins. by Act 56 of 1968, s. 3 (w.e.f. 1-7-1971). 
2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
3. Subs. by Act 56 of 1968, s. 3, for clause (i) (w.e.f. 1-7-1971). 
4. Subs. by Act 19 of 1988, s. 3 and Second Schedule, for “corresponding new bank or a banking company” (w.e.f.  31-3-1988). 
5. Ins. by Act 1 of 1984, s. 56 (w.e.f. 1-7-1971). 
6. Ins. by Act 21 of 1976, s. 33 (w.e.f. 26-9-1975). 
7. Subs. by s. 56, ibid., for, sub-clause (i) (w.e.f. 19-7-1969). 
8. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971). 
9.  The  words  and  figures  “,  and  includes  any  banking  institution  notified  under  section  51  of  the  said  Act  after  such 

commencement” omitted by Act 1 of 1984, s. 56 (w.e.f. 15-2-1984). 

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(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); 

1[(q) the expressions “central co-operative bank,  2*** and “State Co-operative Bank” shall have 
the  meanings  respectively  assigned  to  them  in  the  National  Bank  for  Agriculture  and  Rural 
Development Act, 1981 (61 of 1981); 

(r)  the  expressions  3[“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 (10 of 1949)]. 

CHAPTER II 

ESTABLISHMENT AND MANGEMENT OF THE DEPOSIT INSURANCE CORPORATION 

3.  Establishment  And  Incorporation  of  Deposit  Insurance  Corporation.—(1)  The  Central 
Government  shall,  by  notification  in  the  Official  Gazette,  establish  a  Corporation  by  the  name  of  the 
Deposit  Insurance  Corporation  which  shall  be  a  body  corporate  having  perpetual  succession  and  a 
common seal with power, subject to the provisions of this Act, to acquire, hold or dispose of property and 
to contract, and may, by the said name, sue or be sued. 

4[1A) Any reference in this Act to the Deposit Insurance Corporation shall, on and from the date on 
which 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  Credit 
Guarantee Corporation.] 

(2) The head office of the Corporation shall be at Bombay, but it may, with the previous sanction of 

the Reserve Bank, establish branches or agencies in any other place in India. 

5[4.  Capital  of  Corporation.—(1)  The  authorised  capital  of  the  Corporation  shall  be  one  crore  of 
rupees  but  the  Central  Government  may,  in  consultation  with  the  Reserve  Bank,  increase  such  capital 
from time to time, so, however, that the total authorised capital shall not exceed  6[fifty crores of rupees]. 

(2) The  7[issued capital] for the time being of the Corporation shall be fully paid-up and shall stand 

allotted to the Reserve Bank.] 

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

6. Board of directors.—(1) The Board of directors of the Corporation shall consist of the following, 

namely:— 

8[(a) the Governor, for the time being, of the Reserve Bank or, if the Reserve Bank, in pursuance 
of  the  decision  of  the  Committee  of  the  Central  Board  of  Directors  of  that  Bank,  nominates  any 
Deputy Governor for the purpose, the Deputy Governor so nominated, who shall be the Chairman of 
the Board;] 

(b) 9[a Deputy Governor or any other officer] of the Reserve Bank nominated by that bank; 

(c) an officer of the Central Government nominated by that Government; 

1. Subs. by Act 61 of 1981, s. 61 and the Second Schedule, for clause (q) (w.e.f. 12-7-1982). 
2. The words “co-operative society” omitted by Act 24 of 2004, s. 3 (w.e.f. 1-3-1966). 
3. Subs. by s. 3, ibid., for “primary co-operative bank” (w.e.f. 1-3-1966). 
4. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
5. Subs. by Act 56 of 1968, s. 4, for section 4 (w.e.f. 1-7-1971). 
6. Subs. by Act 1 of 1984, s. 57, for “fifteen crores” (w.e.f.  15-2-1984). 
7. Subs. by Act 21 of 1978, s. 8, for “authorised capital” (w.e.f. 15-7-1978). 
8. Subs. by s. 8, ibid., for clause (a) (w.e.f. 15-7-1978). 
9. Subs. by Act 56 of 1968, s. 5, for “a Deputy Governor” (w.e.f. 7-5-1970). 

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1[(d) five directors nominated by the Central Government in consultation with the Reserve Bank, 
three  of  whom  shall  be  persons  having  special  knowledge  of  commercial  banking,  insurance, 
commerce,  industry  or  finance  and  two  of  whom  shall  be  persons  having  special  knowledge  of,  or 
experience in, co-operative banking or co-operative movement and none of the directors shall be an 
officer of Government or of the Reserve Bank or an officer or other employee of the Corporation or a 
director,  an  officer  or  other  employee  of  a  banking  company  or  a  co-operative  bank  or  otherwise 
actively connected with a banking company or a co-operative bank]. 

2[(e) four directors, nominated by the Central Government in consultation with the Reserve Bank, 
having  special  knowledge  or  practical  experience  in  respect  of  accountancy,  agriculture  and  rural 
economy, banking, co-operation, economics, finance, law or small-scale industry or any other matter, 
the special knowledge of, and practical experience in which, is likely, in the opinion of the Central 
Government to be useful to the Corporation.] 

3[(2)(i).  A  director  nominated  under  clause  (b)  or  clause  (c)  4[or  clause  (d)  or  clause  (e)]  of                   

sub-section (1) shall hold office during the pleasure of the authority nominating him; and 

5[(ii)  Subject  to  the  provisions  contained  in  clause  (i),  a  director  nominated  under  clause  (d)  or             

clause  (e)  of  sub-section  (1),  shall  hold  office  for  such  period,  not  exceeding  three  years,  as  may  be 
specified by the Central Government in this behalf 6***, and shall be eligible for re-nomination: 

Provided that no such director shall hold office continuously for a period exceeding six years.]] 

(3) A person shall not be capable of being nominated as a director under clause (d) 7[or clause (e)] of 

sub-section (1) if—    

(a) he has been removed or dismissed from the service of Government or of a local authority or of 
a corporation or company in which not less than fifty-one per cent. of the paid-up share capital is held 
by Government; or 

(b) he is or at any time has been adjudicated as insolvent or has suspended payment of his debts 

or has compounded with his creditors; or 

(c) he is of  unsound mind and stands so declared by a competent Court; or 

(d)  he  has  been  convicted  of  any  offence  which,  in  the  opinion  of  the  Central  Government, 

involves moral turpitude. 

(4) If a director nominated under clause (d) of sub-section (1)—    

(a)  becomes  subject  to  any  of  the  disqualifications  mentioned  in  clauses  (a)  to  (d)  of                

sub-section (3); or 

(b) is absent without leave of the Board for more than three consecutive meetings thereof; or 

(c) becomes a director or an officer or an employee of an insured bank or is, in the opinion of the 

Central Government, otherwise actively connected with such bank; or 

(d)  becomes  an  officer  or  other  employee  of  Government  or  of  the  Reserve  Bank  or  of  the 

Corporation; 

his seat shall thereupon become vacant. 

1. Subs. by Act 56 of 1968, s. 5, for clause (d) (w.e.f. 10-3-1986). 
2. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
3. Subs. by Act 1 of 1984, s. 58, for sub-section (2) (w.e.f. 15-2-1984). 
4. Ins. by Act 66 of 1988, s. 24 (w.e.f. 30-12-1988). 
5. Subs. by s. 24, ibid., for clause (ii) (w.e.f. 30-12-1988). 
6. The words “and thereafter until his successor assumes office” omitted by Act 45 of 2006, s. 17 (w.e.f. 16-10-2006). 
7. Ins. by Act 1 of 1984, s. 58 (w.e.f. 15-2-1984). 

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1[(5) If a director nominated under clause (e) of sub-section (1)—    

(a)  becomes  subject  to  any  of  the  disqualifications  mentioned  in  clauses  (a)  to  (d)  of                            

sub-section (3); or 

(b) is absent without leave of the Board for more than three consecutive meetings thereof,  

his seat shall thereupon becomes vacant.] 

7. Meetings  of Board.—(1) The Board shall meet at such times and places and shall observe such 

rules of procedure in regard to the transaction of business at its meetings as may be prescribed. 

(2) The Chairman or, if for any reason he is unable to attend the director nominated under clause (b) 
of sub-section (1) of section 6 shall preside at meetings of the Board and, in the event of equality of votes, 
shall have a second or casting vote. 

8. Committees of Corporation.—(1) The Board may constitute an Executive Committee consisting 

of such number of directors as may be prescribed. 

(2)  The  Executive  Committee  shall  discharge  such  functions  as  may  be  prescribed  or  may  be 

delegated to it by the Board. 

(3)  The  Board  may  constitute  such  other  committees,  whether  consisting  wholly  of  directors  or 
wholly of other persons or partly of directors and partly of other persons as it thinks fit for the purpose of 
discharging such of its functions as may be prescribed or may be delegated to them by the Board. 

(4) A committee constituted under this section shall meet at such times and places and shall observe 

such rules of procedure in regard to the transaction of business at its meetings as may be prescribed. 

(5) The members of a committee (other than directors of the Board) shall be paid by the Corporation 
such  fees  and  allowances  for  attending  its  meetings  and  for  attending  to  any  other  work  of  the 
Corporation as may be prescribed. 

9. Fees and allowances of directors.—The directors of the Board shall be paid by the Corporation 
such  fees  and  allowances  for  attending  the  meetings  of  the  Board  or  of  any  its  committees  and  for 
attending to any other work of the Corporation as may be prescribed: 

Provided that no fees shall be payable to the Chairman or to the director nominated under clause (b) 

of clause (c) of sub-section (1) of section 6. 

CHAPTER III 

REGISTRATION OF BANKING COMPANIES 2[AND CO-OPERATIVE BANKS ] AS INSURED BANKS AND LIABILITY OF 
CORPORATION TO DEPOSITORS 

10.  Registration  of  existing  banking  companies.—The  Corporation  shall  register  every  existing 
banking company as an insured bank before the expiry of thirty days from the date of commencement of 
this Act. 

11.  Registration  of  new  banking  companies.—The  Corporation  shall  register  every  new  banking 
company  as  an  insured  bank  as  soon  as  may  be  after  it  is  granted  a  licence  under  section  22  of  the 
3[Banking Regulation Act, 1949 (10 of 1949)], 4*** 

5[11A.  Registration  of  Regional  Rural  Banks.—The  Corporation  shall  register  every  Regional 

Rural Bank, before the expiry of thirty days from the date of its establishment.] 

12. Registration of defunct banking companies.—Every banking company being a defunct banking 
company at the commencement of this Act, by reason of sub-clause (vii) or sub-clause (viii) of clause (f) 

1. Ins. by Act 1 of 1984, s. 58 (w.e.f. 15-2-1984). 
2. Ins. by Act 56 of 1968, s. 6 (w.e.f. 1-7-1971). 
3. Subs. by s. 2, ibid., for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971).  
4. The words and figures “, or, as the case may be, after it is notified under section 51 of the said Act” omitted by Act 1 of 1984, 

s. 59 (w.e.f. 15-2-1984). 

5. Ins. by Act 21 of 1976, s. 33 (w.e.f. 26-9-1975). 

9 

 
                                                           
of section 2 shall, unless it becomes a defunct banking company under any other sub-clause of that clause, 
be registered by the Corporation as an insured bank as soon as may be after the termination of the order 
moratorium or, as the case may be, the rejection of the application for its winding up. 

 13. Cancellation of registration.—1[(1)] The registration of a banking company as an insured bank 

shall stand cancelled on the occurrence of any of the following events, namely:— 

(a) if it has been prohibited from receiving fresh deposits; or 
(b)  if  it  has  been  informed  by  notice  in  writing  by  the  Reserve  Bank  that  its  licence  has  been 
cancelled  under  section  22  of  2[the  Banking  Regulation  Act,  1949  (10  of  1949)]  or  that  a  licence 
under that section cannot be granted to it; or 

(c) if it has been ordered to be wound up; or 
(d) if it has transferred all its deposit liabilities in India to any other institution; or 
(e) if it has ceased to be a banking company within the meaning of sub-section (2) of section 36A 
of  2[the  Banking  Regulation  Act,  1949  (10  of  1949)]  or  has  converted  itself  into  a  non-banking 
company; or 

(f) if a liquidator has been appointed in pursuance of a resolution for the voluntary winding up of 

its affairs; or 

(g)  if  in  respect  of  it  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 

(h) if it has amalgamated with any other banking institution. 

3[(2)  The  provisions  of  clauses  (a),  4***  (c),  (d)  and  (h)  of  sub-section  (1)  shall  apply  to  a 

corresponding new bank as they apply to a banking company.] 

 5[(3) The provisions of clauses (a), 4*** (c), (d) and (h) of sub-section (1) shall apply to a Regional 

Rural Bank as they apply to a banking company.] 

6[13A. Registration of co-operative banks.—(1) No co-operative bank shall be registered under this 

section unless it is an eligible co-operative bank. 

(2) Subject as aforesaid— 

(a) the Corporation shall register every existing co-operative bank as an insured bank before the 
expiry  of  thirty  days  next  following  the  commencement  of  the  Deposit  Insurance  Corporation 
(Amendment) Act, 1968 (56 of 1968); 

(b) the Corporation shall register as an insured bank— 

(i)  every  new  co-operative  bank  [other  than  a  primary  credit  society  becoming  a  primary           

co-operative bank after the commencement of the Deposit Insurance Corporation (Amendment) 
Act, 1968 (56 of 1968)] as soon as may be after it is granted a licence under section 22 of the 
Banking Regulation Act, 1949 (10 of 1949); 

(ii) a primary credit society becoming a primary co-operative bank after such commencement 

within three months of its having made an application for a licence under the said section: 

Provided that a bank referred to in clause (b) shall not be so registered if it has been informed by 

notice in writing by the Reserve Bank that such a licence cannot be granted to it. 

7[(iii) every co-operative bank which has come into existence after the commencement of the 
Deposit Insurance Corporation (Amendment) Act, 1968 (56 of 1968), as a result of the division of 

1. Section 13 re-numbered as sub-section (1) thereof by Act 5 of 1970, s. 20 (w.e.f. 19-7-1969). 
2. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971).   
3. Ins. by Act 5 of 1970, s. 20 (w.e.f. 19-7-1969). 
4. The brackets and letter “(b),” omitted by 1 of 1984, s. 60 (w.e.f. 15-2-1984). 
5. Ins. by Act 21 of 1976, s. 33 (w.e.f. 26-9-1975). 
6.  Ins. by Act 56 of 1968, s. 7 (w.e.f. 1-7-1971). 
7.  Ins. by Act 1 of 1984, s. 61 (w.e.f. 15-2-1984). 

10 

 
                                                           
any other co-operative society carrying on business as a co-operative bank, or the amalgamation 
of two or more co-operative societies carrying on banking business, at the commencement of the 
Banking  Laws  (Application  to  Co-operative  Societies)  Act,  1965  (23  of  1965),  or  at  any  time 
thereafter,  within  three  months  of  its  having  made  an  application  for  a  licence  under  the  said 
section;] 

13B.  Registration  of  defunct  co-operative  banks.—Every  co-operative  bank  being  a  defunct                 

co-operative bank at the commencement of the Deposit Insurance Corporation (Amendment) Act, 1968 
(56 of 1968), by reason of sub-clause (vii) or Sub-clause (viii) of clause (ff) of section 2 shall, unless it 
becomes  a  defunct  co-operative  bank  under  any  other  sub-clause  of  that  clause,  be  registered  by  the 
Corporation as an insured bank as soon as may be after the termination of the order of moratorium, or as 
the case may be, the rejection or dismissal of the application for its winding up provided it is an eligible 
co-operative  bank  and  it  either  holds  a  licence  granted  under  section  22  of  the  Banking  Regulation              
Act, 1949 (10 of 1949), or having applied for such licence in accordance with that section, has not been 
informed by notice in writing by the Reserve Bank that a licence cannot be granted to it. 

 13C. Cancellation of registration of co-operative banks.—The registration of a co-operative bank 

as an insured bank shall stand cancelled on the occurrence of any of the following events, namely:—    

(a) if it has been prohibited from accepting fresh deposits; or 

(b)  if  it  has  been  informed  by  notice  in  writing  by  the  Reserve  Bank  that  its  licence  has  been 
cancelled under section 22 of the Banking Regulation Act, 1949 (10 of 1949), or a licence under that 
section cannot be granted to it; or 

(c) if it has been ordered or directed to be wound up; or 

(d) if it has transferred all its deposit liabilities in India to any other institution; or 

(e) if it has ceased to be a co-operative bank within the meaning of sub-section (2) of section 36A 

of the Banking Regulation Act, 1949 (10 of 1949); or 

(f) if it has converted itself into a non-banking co-operative society; or 

(g)  if  in  respect  of  it  any  scheme  of  compromise  or  arrangement  or  of  reconstruction  has  been 
sanctioned by a competent authority and the said scheme does not permit the acceptance by it of fresh 
deposits; or 

(h) if it has been amalgamated with any other co-operative society; or 

(i) if it ceases to be an eligible co-operative bank, that is, if the law for the time being governing 
such  co-operative  bank  does  not  provide  for  all  or  any  of  the  matters  referred  to  in  clause  (gg)  of 
section 2. 

13D.  Circumstances  in  which  Reserve  Bank  may  require  winding  up  of  co-operative               

banks.—(1)  The  circumstances  referred  to  in  sub-clause  (ii)  of  clause  (gg)  of  section  2  (being 
circumstances  in  which  the  Reserve  Bank  may  require  the  winding  up  of  a  co-operative  bank)  are  the 
following, namely:— 

(a) that the co-operative bank has failed to comply with the requirements specified in section 11 

of the Banking Regulation Act, 1949 (10 of 1949); or 

(b)  that  the  co-operative  bank  has  by  reason  of  the  provisions  of  section  22  of  the  said  Act 

become disentitled to carry on banking business in India; or 

(c) that the co-operative bank has been prohibited from receiving fresh deposits by an order under 
sub-section (4) of section 35 of the said Act or under clause (b) of sub-section (3A) of section 42 of 
the Reserve Bank of India Act, 1934 (2 of 1934); or 

(d)  that  the  co-operative  bank  having  failed  to  comply  with  any  requirement  of  the  Banking 
Regulation Act, 1949   (10 of 1949), other than the requirements laid down in section 11   thereof, has  

11 

 
 
continued  such  failure  or,  having  contravened  any  provision  of  that  Act  has  continued  such 
contravention beyond such period or periods as may be specified in that behalf by the Reserve Bank 
from time to time, after notice in writing of such failure or contravention has been conveyed to the  
co-operative bank; or 

(e) that the co-operative bank is unable to pay its debts; or 

(f) that in the opinion of the Reserve Bank— 

(i)  a  compromise  or  arrangement  sanctioned  by  a  competent  authority  in  respect  of  the         

co-operative bank cannot be worked satisfactorily with or without modifications, or 

(ii) the continuance of the co-operative bank is prejudicial to the interests of its depositors. 

(2) Without prejudice to the provisions of any other law for the time being in force, a co-operative 

bank shall, for the purpose of clause (e) of sub-section (1), be deemed to be unable to pay its debts:— 

(i) if, on the basis of the returns, statements or information furnished to the Reserve Bank under 
or  in  pursuance  of  the  provisions  of  the  Banking  Regulation  Act,  1949  (10  of  1949),  the  Reserve 
Bank is of opinion that the co-operative bank is unable to pay its debts; or 

(ii) if the co-operative bank has refused to meet any lawful demand made at any of its offices or 
branches within two working days, if such demand is made at a place where there is an office, branch 
or agency of the Reserve Bank, or within five working days if such demand is made elsewhere and, in 
either  case,  the  Reserve  Bank  Certifies  in  writing  that  the  co-operative  bank  is  unable  to  pay  its 
debts.] 

 14.  Intimation  of  registration.—(1)  Where  the  Corporation  has  registered  any 1[  2[banking 
company, Regional Rural Bank] or co-operative bank] as an insured bank, it shall, within thirty days of its 
registration,  send  an  intimation  in  writing  to  the 1[2[banking  company,  Regional  Rural  Bank]  or                  
co-operative bank] that it has been registered as an insured bank. 

(2) Every such intimation shall indicate the manner in which the premium payable by the bank under 

section 15 may be calculated. 

15. Premium.—(1) Every insured bank shall, so long as it continues to be registered, be liable to pay 
a premium to the Corporation on its deposits at such rate or rates as may 3[with the previous approval of 
the Reserve Bank, be notified by the Corporation, from time to time, to the insured banks and different 
rates may be notified for different categories of insured banks:] 

Provided that the premium payable by any insured bank for any period shall not exceed fifteen  paisa 
per  annum  for  every  hundred  rupees  of the total  amount  of  the  deposits  in that bank  at  the  end  of  that 
period or, where its registration has been cancelled during that period, on the date of its cancellation: 

Provided  further  that  where  the  registration  of  any  insured  bank  is  cancelled  under  section  13  4[or 
under section 13C] such cancellation shall not affect the liability of that bank for payment of premium for 
the period before such cancellation and of any interest due under the provisions of this section. 

(2)  The  premium  shall  be  payable  for  such  periods,  at  such  times  and  in  such  manner  as  may  be 

prescribed. 

(3)  If  an  insured  bank  makes  any  default  in  payment  of  any  amount  of  premium,  it  shall,  for  the 
period  of  such  default,  be  liable  to  pay  to  the  Corporation  interest  on  such  amount  at  such  rate  5[not 
exceeding eight per cent. over and above the bank rate as may be prescribed]. 

1. Subs. by Act 56 of 1968, s. 8, for “banking company” (w.e.f. 1-7-1971). 
2. Subs. by Act 21 of 1976, s. 33, for “banking company” (w.e.f. 26-9-1975). 
3. Subs. by Act 21 of 1978, s. 8, for certain words (w.e.f. 15-7-1978). 
4. Ins. by Act 56 of 1968, s. 9 (w.e.f. 1-7-1971). 
5. Subs. by Act 21 of 1978, s. 8, for “not exceeding eight per cent. per annum as may be prescribed”  (w.e.f. 15-7-1978). 

12 

 
 
 
                                                           
1[15A. Cancellation of registration of an insured bank for non-payment of premium.—(1) The 
Corporation  may  cancel  the  registration  of  an  insured  bank  if  it  fails  to  pay  the  premium  for  three 
consecutive periods: 

Provided  that  no such  registration  shall  be  cancelled except after  giving  to the concerned  bank  one 

month's notice in writing calling upon that bank to pay the amount in default. 

(2)  The  Corporation  may  restore  the  registration  of  a  bank  whose  registration  has  been  cancelled 
under sub-section (1), if the concerned bank requests the Corporation to restore the registration and pays 
all  the  amounts  due  by  way  of  premia  from  the  date  of  default  till  the  date  of  payment  together  with 
interest due thereon on the date of payment: 

Provided that the Corporation shall not restore the registration unless it is satisfied, on an inspection 

of the concerned bank or otherwise, that it is eligible to be registered as an insured bank.] 

16. Liability of corporation in respect of insured deposits.—(1) Where an order for the winding up 
or  liquidation  of an  insured  bank  is  made,  the  Corporation shall, subject  to the other  provisions  of this 
Act, be liable to pay to every depositor of that bank in accordance with the provisions of section 17 an 
amount equal to the amount due to him in respect of his deposit in that bank at the time when such order 
is made: 

Provided that the liability of the corporation in respect of an insured bank referred to in clause (a) or 
clause (b) 2[of sub-section (1) of section 13] 3[or clause (a) or clause (b) of section 13C] shall be limited 
to the deposits as on the date of the cancellation of the registration: 

Provided further that the total amount payable by the Corporation to any one depositer in respect of 
his deposit in that bank in the same capacity and in the same right shall not exceed one thousand and five 
hundred rupees: 

Provided further that the Corporation may, from time to time, having regard to its financial position 
and to the interests of the banking system of the country as a whole, raise, with the previous approval of 
the Central Government, the aforesaid limit of one thousand and five hundred rupees. 

(2) Where in respect of an insured bank a scheme of compromise or arrangement or of reconstruction 
or amalgamation has been sanctioned by any competent authority and the said scheme provides for each 
depositor  being  paid  or  credited  with,  on  the  date  on  which  the  scheme  comes  into  force,  an  amount 
which is less than the original amount and also the specified amount, the Corporation shall be liable to 
pay  every  such  depositor  in  accordance  with,  the  provisions  of  section  18  an  amount  equivalent  to  the 
difference between the amount so paid or credited and the original amount, or the difference between the 
amount so paid or credited and the specified amount, whichever is less: 

Provided that where any such scheme also provides that any payment made to a depositor before the 
coming into force of the scheme shall be reckoned towards the payment due to him under that scheme, 
then the scheme shall be deemed to have provided for that payment being made on the date of its coming 
into force. 

(3)  For  the  purposes  of  this  section,  the  amount  of  a  deposit  shall  be  determined  after  deducting 
therefrom any ascertained sum of money which the insured banks may be legally entitled to claim by way 
of set off against the depositor in the same capacity and in the same right. 

(4) In this section,— 

(a) “original amount” in relation to a depositor means the total amount due by the insured bank 
immediately before the date of coming into force of the scheme of compromise or arrangement or, as 
the case may be, of reconstruction or amalgamation to the depositor in respect of  his deposit in the 
bank in the same capacity and in the same right: 

1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
2. Subs. by Act 1 of 1984, s. 62, for “of section 13” (w.e.f. 19-7-1969). 
3. Ins. by Act 56 of 1968, s. 10 (w.e.f. 1-7-1971). 

13 

 
                                                           
Provided that where under the proviso to sub-section (2), the scheme is deemed to have provided 
for any payment being made on the date of its coming into force the amount of such payment shall be 
included in calculating the original amount; 

(b) “specified amount” means one thousand and five hundred rupees, or, as the case may be, the 

amount fixed by the Corporation under the third proviso to sub-section (1). 

17. Manner of payment by Corporation in case of winding up of insured banks.—(1) Where an 
insured  bank  has  been  ordered  to  be  wound  up  or  to  be  taken  into  liquidation  and  a  liquidator,  by 
whatever  name  called, has  been  appointed in respect  thereof,  the liquidator shall,  with the  lest  possible 
delay and in any case not later than three months from the date of his assuming charge of office, furnish 
to  the  Corporation  a  list  in  such  form  and  manner  as  may  be  specified  by  the  Corporation  showing 
separately  the  deposits  in  respect  of  each  depositor  and  the  amounts  of  set  off  referred  to  in                           
sub-section (3) of section 16. 

(2) Before the expiry of two months from the receipt of such list from the liquidator the Corporation 

shall pay 1[the amount payable under section 16 in respect of the deposit of each depositor— 

(a) directly to the depositor, or 

(b) to the depositor through such agency as the Corporation may determine, or 

(c) to the liquidator.] 

2[(3)  Where  the  Corporation  pays  under  sub-section  (2),  any  amount  in  respect  of  the  deposit  of  a 
depositor to the liquidator, the liquidator shall pay or cause to be paid that amount to the depositor and 
any expenses incurred by the liquidator in making such payment shall be treated as expenses incurred in 
the winding up of the insured bank.] 

18. Manner of payment by Corporation in case of scheme of compromise or arrangement or of 
reconstruction  or  amalgamation  in  respect  of  an  insured  bank.—(1)  Where  a  scheme  of 
amalgamation  of  any  insured  bank  with  any  other  banking  institution  (hereinafter  referred  to  as  the 
transferee bank) or a scheme of compromise or arrangement or of reconstruction in respect of such bank 
has been sanctioned and the Corporation has become liable to pay to depositors of the insured bank under 
sub-section (2) of section 16, the transferee bank where the scheme is of amalgamation and the insured 
bank in any other case shall, with the least possible delay and in any case not later than three months from 
the date on which such scheme takes effect, furnish to the Corporation a list in such form and manner as 
may  be  specified  by  the  Corporation  and  certified  to  be  correct  by  the  chief  executive  officer  of  the 
transferee bank or, as the case may be, of the insured bank showing separately deposits in respect of each 
depositor and the amounts of set off referred to in sub-section (3) of section 16 and also the amounts paid 
or credited or deemed to have been paid under the scheme. 

(2)  Before  the  expiry  of  two  months  from  the  receipt  of  such  list,  the  Corporation  shall  pay  the 
amount payable under section 16 either directly to the depositor or to the transferee bank or the insured 
bank for being credited in his account. 

19. Discharge of the liability of Corporation.—Any amount paid by the Corporation under section 
17 or section 18 in respect of a deposit shall, to the extent of the amount paid, discharge the Corporation 
from its liability in respect of that deposit. 

20. Provision for unpaid amounts.—Where any depositor to whom any payment is to be made in 
accordance  with  the  provisions  of  section  17  or  section  18  cannot  be  found  or  is  not  readily  traceable, 
adequate provision shall be made by the Corporation for such payment and the amount of such provision 
shall be accounted for separately in its books. 

 21.  Repayment  of  the  amount  to  Corporation.—(1)  Where  any  amount  has  been  paid  under 
section 17 or section 18 or any provision therefore has been made under section 20, the Corporation shall 

1. Subs. by Act 56 of 1968, s. 11, for  certain words (w.e.f 1-7-1971). 
2.  Ins. by s. 11, ibid. (w.e.f. 1-7-1971). 

14 

 
                                                           
furnish to the liquidator or the insured bank or to the transferee bank, as the case may be, information as 
regards the amount so paid or provided for. 

(2)  On  receipt  of  the  information  under  sub-section  (1),  notwithstanding  anything  to  the  contrary 

contained in any other law for the time being in force,— 

(a) the liquidator shall, within such time and in such manner as may be prescribed, repay to the 
Corporation out of the amount, if any, payable by him in respect of any deposit such sum or sums as 
make up the amount paid or provided for by the Corporation in respect of that deposit; 

(b) the insured bank or as the case may be, the transferee bank shall, within such time and in such 
manner  as  may  be  prescribed,  repay  to  the  Corporation  out  of  the  amount,  if  any,  to  be  paid  or 
credited in respect of any deposit after the date of the coming into force of the scheme referred to in 
section  18,  such  sum  or  sums  as  make  up  the  amount  paid  or  provided  for  by  the  Corporation  in 
respect of that deposit. 

1[CHAPTER III-A 

CREDIT GUARANTEE FUNCTIONS 

21A. Guaranteeing of credit facilities and indemnifying credit institutions.—(1) The Corporation 
may guarantee credit facilities given by any credit institution and may also indemnify credit institutions in 
respect of credit facilities granted by them. 

(2) The Board may, for the purpose of guaranteeing credit facilities granted by credit institutions or 
indemnifying  credit  institutions,  frame  one  or  more  schemes  in  such  form  and  in  such  manner  and 
containing such provisions as the Board may, from time to time, deem fit. 

(3) The  Board  may  levy,  on  every  credit institution availing  itself  of the  guarantees  or  indemnities 
provided by the Corporation, a fee at such rate or rates as may, with the previous approval of the Reserve 
Bank, be notified by the Corporation to the credit institution from time to time and different rates may be 
notified for different categories of credit institutions, for different types of credit facilities, for different 
areas  where  the  credit  facilities  are  utilised,  or  for  different  categories  of  beneficiaries  of  the  credit 
facilities. 

Explanation.—“Credit  facility”  means  any  financial  assistance,  including  a  loan  or  advance,  cash 
credit, overdraft, bills purchased or discounted, a term of instalment credit and any guarantee other than a 
performance guarantee, granted or issued in India by a credit institution at any of its offices in India. 

21B. Corporation to act as agent of Central Government.—The Corporation may act as agent for 

the Central Government,— 

(i) in guaranteeing the due performance by any small-scale industrial concern or other institution 
or undertaking or categories of institutions or undertakings approved by the Central Government in 
this behalf, of its, or their, obligations to any credit institution in respect of loans and advances made 
or other credit facilities provided to it, or them, by such credit institution, and 

(ii) in making, as such agent, of payments in connection with such guarantee.] 

CHAPTER IV 

FUNDS, ACCOUNTS AND AUDIT 

2[22. Funds of Corporation.—The Corporation shall maintain three funds, to be called, respectively, 

the Deposit Insurance Fund, the Credit Guarantee Fund and the General Fund.] 

23. Deposit Insurance Fund.—(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; 

1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
2. Subs. by s. 8, ibid., for section 22 (w.e.f. 15-7-1978). 

15 

 
                                                           
(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) 3[;and] 

1[(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.] 

1[23A. Credit Guarantee Fund.—(1) To the Credit Guarantee Fund shall be credited,— 

(a) all amounts in the Reserve for unexpired Guarantee Risks maintained by the Credit Guarantee 

Corporation  of  India  Limited,  a  company  formed  and  registered  under  the  Companies  Act,  1956              
(1 of 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;] 

24. General Fund.—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) 1[of section 23, or, as the case may be, 
sub-section (2) of section 23A] shall be made out of that Fund. 

25.  Investment.—All  moneys  belonging  to  the  Deposit  Insurance  Fund  1[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 other moneys shall be 
deposited with the Reserve Bank. 

1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
2. The word “and” omitted by s. 8, ibid. (w.e.f. 15-7-1978). 
3. Added by s. 8, ibid. (w.e.f. 15-7-1978). 

16 

 
 
 
                                                           
1[25A. Amounts 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 utilisation, will be 
adequate to meet any probable claim on that Fund.] 

 26.  Advances  by  Reserve  Bank.—(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 Fund 1[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. 

2[27.  Advances  From  General  Fund  to  the  Deposit  Insurance  Fund  or  Credit  Guarantee 
Fund.—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.] 

28. Preparation of balance-sheet, etc., by Corporation.—(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  December  3[or  such  other  date  in  each  year  as  the  Central  Government  may,  by 
notification in the Official Gazette, specify]: 

4[Provided  that  with  a  view  to  facilitating  the  transition  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.] 

29. Audit.—(1) The affairs of the Corporation shall be audited by an auditor duly qualified to act as 
an  auditor  under  sub-section  (1)  of  section  226  of  the  Companies  Act,  1956  (1  of  1956),  who  shall  be 
appointed  by  the  Board  with  the  previous  approval  of  the  Reserve  Bank  and  shall  receive  such 
remuneration from the Corporation as the Reserve Bank may fix. 

(2) The auditor shall be supplied with a copy of the annual balance-sheet of the Corporation and it 
shall be his duty to examine it together with the accounts and vouchers relating thereto and he shall have a 
list  delivered  to  him  of  all  books  kept  by  the  Corporation  and  shall  at  all reasonable times  have  to  the 
books, accounts and other documents of the Corporation and may, in relation to such accounts examine 
any director of the Board or any officer or employee of the Corporation. 

(3) The  auditor  shall  make  a  report to  the  Corporation  upon the annual  balance-sheet  and  accounts 

and  in  every  such  report  he  shall  state  whether  in  his  opinion  the  balance-sheet  is  a  full  and  fair               
balance-sheet  containing  all  necessary  particulars  and  properly  drawn  up  so  as  to  exhibit  a  true  and 
correct  view  of the  state  of  affairs of the  Corporation  and  in case  he  had  called  for any  explanation  or 
information from the Board, whether it has been given and whether it is satisfactory. 

1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
2. Subs. by s. 8, ibid., for section 27 (w.e.f. 15-7-1978). 
3. Subs. by Act 66 of 1988, s. 25, for “, each year” (w.e.f. 30-12-1988). 
4. Ins. by s. 25, ibid. (w.e.f. 30-12-1988) 

17 

 
                                                           
(4) Without  prejudice to anything  contained in the preceding  sub-sections,  the Central  Government 
may at any time appoint the Comptroller and Auditor-General of India to examine and report upon the 
accounts of the Corporation, and any expenditure incurred by him in connection with such examination 
and report shall be payable by the Corporation to the Comptroller and Auditor-General of India. 

1[30.  Income-tax—2[(1)]  Notwithstanding  anything  contained  in  the  Indian  Income-tax  Act,  1961  
(43  of  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 following that year.] 

4[(2) Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 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 (21 of 1978), comes into force and for four accounting years following that years.] 

31. Reserve Fund.—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. 

32.  Annual  accounts  and  reports.—(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 laid 5[as soon as may be after they received before each House of Parliament 6***]. 

CHAPTER V 

MISCELLANEOUS 

33. Staff of Corporation.—(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. 

34.  Returns  from  insured  banks.—(1)  Notwithstanding  anything  contained  in  7[the  Banking 
Regulation Act, 1949 (10 of 1949)] or any other law for the time being in force the Corporation may at 
any  time  direct  an  insured  bank  4[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 bank 4[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 this section in such consolidated form as it may think fit. 

1. Subs. by Act 20 of 1967, s. 44, for section 30 (w.e.f. 1-4-1967). 
2. Section 30 re-numbered as sub-section (1) thereof by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
3. Subs. by Act 32 of 1971, s. 53, for “nine accounting years” (w.e.f. 1-4-1971). 
4. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
5. Subs. by Act 1 of 1984, s. 63, for certain words (w.e.f. 15-2-1984). 
6. The 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 sessions” omitted by Act 81 of 1985, s.  6 (w.e.f. 1-5-1986).                                                                                          

7. Subs. by Act 56 of 1968, s. 2, for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971). 

18 

 
                                                           
35. Corporation to have access to records.—(1) The Corporation shall have free access to all such 
records of an insured bank 1[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 bank 1 [or credit institution] to furnish to it copies of any 
of  the  records  referred  to  in  sub-section  (1)  and  the  bank  1[or  the  credit  institution]  shall  be  bound  to 
comply with the requisition. 

36.  Inspection  of  insured  banks  by  Reserve  Bank.—(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 bank 1[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 officers 2[or 
through such other person or agency as the Reserve Bank may determine.] 

(2) The provisions of sub-section (2) and sub-section (3) of section 35 of  3[the Banking Regulation 
Act, 1949 (10 of 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 and 4[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. 

37. Corporation to furnish information to Reserve Bank.—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. 

38. Reserve Bank to furnish information to Corporation.—The Reserve Bank shall, on a request 
in writing from the Corporation, furnish to it any report or information relating to an insured bank  1[or a 
credit institution] made or obtained by it under or in pursuance of the Reserve Bank of India Act, 1934 or 
3[the Banking Regulation Act, 1949 (10 of 1949).] 

39. Declaration of fidelity and secrecy.—5[(1)] Every director, auditor, officer or other employee of 
the Corporation or an employee of the Reserve Bank whose services are utilised 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.] 

6[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit 

Information Companies (Regulation) Act, 2005.] 

 40.  Indemnity  of  directors.—(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. 

1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978). 
2. Ins. by Act 56 of 1968, s. 12 (w.e.f. 1-7-1971). 
3. Subs. by s. 2, ibid., for “the Banking Companies Act, 1949” (w.e.f. 1-7-1971). 
4. Subs. by Act 21 of 1978, s. 8, for certain words (w.e.f. 15-7-1978). 
5. Section 39 re-numbered as sub-section (1) thereof by s. 8, ibid. (w.e.f. 15-7-1978). 
6. Ins. by Act 30 of 2005, s. 34 and the Schedule (w.e.f. 14-12-2006). 

19 

 
                                                           
(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. 

41. Defects in appointments not to invalidate acts, etc.—(1) No act or proceeding 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 a director or that there was any other defect in 
his appointment. 

42. Protection of action taken under this act.—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 or 1[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. 

43. Companies Act, 1956 and Insurance Act, 1938 not to apply.—Nothing in the Companies Act, 

1956 (1 of 1956) or the Insurance Act, 1938 (4 of 1938), shall apply to the Corporation. 

2[43A.  Powers  of  Reserve  Bank  not  to  apply  to  International  Financial  Services  Centre.—
Notwithstanding anything contained in any other law for the time being in force, the powers exercisable 
by the Reserve Bank under this Act,— 

(a)  shall  not  extend  to  an  International  Financial  Services  Centre  set  up  under  sub-section  (1) 

of section of the Special Economic Zones Act, 2005 (28 of 2005); 

(b)  shall  be  exercisable  by  the  International  Financial  Services  Centres  Authority  established 
under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019,  

in so far as regulation of financial products, financial services and financial institutions that are permitted 
in the International Financial Services Centres are concerned.] 

44.  Liquidation  of  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. 

45. Power of Central Government to give directions.—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  relates  to  a  matter  of  policy  involving  public  interest,  the  decision  of  the 
Central Government thereon shall be final. 

 46. Dispute as to amount of premium.—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.  Subs. by 56 of 1968, s. 13, for “or any other person authorised by the Corporation” (w.e.f. 1-7-1971). 
2.   Ins. by Act 50 of 2019, s.  33 and the second Schedule (w.e.f. 1-10-2020). 

20 

 
                                                           
47.  Penalties.—(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. 

48. Offences by companies.—(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 includes 1[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  1[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]. 

2[49.  Cognizance  and  trial  of  offences.—(1)  Notwithstanding  anything  contained  in  the  Code  of 
Criminal Procedure, 1973 (2 of 1974), no Court shall take cognizance of any offence punishable under 
this Act except upon a complaint, 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  (2  of  1974),  a 
Magistrate  may,  if  he  sees  reason  so  to  do,  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.] 

50.  Regulation.—(1)  The  Board  may,  with  the  previous  approval  of  the  Reserve  Bank,  3[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— 

1. Ins. by Act 56 of 1968, s. 14 (w.e.f. 1-7-1971). 
2. Subs. by Act 21 of 1978, s. 8, for section 49 (w.e.f. 15-7-1978). 
3. Ins. by Act 66 of 1988, s. 26 (w.e.f. 30-12-1988). 

21 

 
                                                           
(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  meetings  including  the  quorum  necessary  for  the 
transaction of business; 

(b)  the  number  of  directors  constituting  an  Executive  Committee,  and  the  functions  that  such 

committee 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 accounts 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  Act  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. 

1[(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.] 

51.  [Amendment  of  Certain  Enactments.]—Rep.  by  the  Repealing  and  Amending  Act,  1964                      

(52 of 1964), s. 2 and First Schedule (w.e.f. 15-7-1978). 

1. Ins. by Act 1 of 1984, s. 64 (w.e.f. 15-2-1984). 

22 

 
 
 
                                                           
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 
the  1[Deposit  Insurance  and  Credit  Guarantee  Corporation]  and  which  properly  relate  to  the  office  or 
position held 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. 

(Signature) 

Singed before me. 

________ 

THE SECOND SCHEDULE.—[Amendment of certain enactments.] Rep. by the Repealing and 

Amending Act, 1964 (52 of 1964), s. 2 and First Schedule. 

1. Subs. by Act 21 of 1978, s. 8, for “Deposit Insurance Corporation” (w.e.f. 15-7-1978). 

23 

 
                                                           
 
