What does the Deposit Insurance and Credit Guarantee Corporation do?

The Deposit Insurance and Credit Guarantee Corporation (DICGC) is an institution established to provide insurance coverage to depositors in Indian banks. It plays a critical role in maintaining public confidence in the banking system by protecting depositors' funds. Specifically, it ensures that deposits held in banks are safe up to a certain limit, thus providing a safety net in the event of a bank failure. This insurance mechanism helps protect individuals and businesses by guaranteeing that they will receive their deposits back, regardless of the financial health of the bank.

Additionally, the DICGC also guarantees credit for banks, essentially supporting them in extending loans without significantly increasing their risks related to depositor withdrawals. This dual role fosters stability within the banking sector, especially during economic uncertainty or banking crises.

In contrast, the other options refer to different functions that are not the responsibility of the DICGC. For instance, regulating securities markets is typically managed by entities like the Securities and Exchange Board of India (SEBI), while corporate insolvency cases involve legal processes often governed by the Insolvency and Bankruptcy Code in India. Managing monetary policy falls under the purview of central banking authorities such as the Reserve Bank of India (RBI), which focuses on controlling interest rates and inflation. Thus