BANKING AFFAIRS

Detailed explanation-1: -4.2. The concept of insuring deposits kept with banks received attention first time in the year 1948 after the banking crises in Bengal. The question came up for reconsideration in the year 1949, but it was decided to hold it in abeyance till the Reserve Bank ensured adequate arrangements for inspection of banks.

Detailed explanation-2: -Federal deposit insurance became effective on January 1, 1934, providing depositors with $2, 500 in coverage, and by any measure it was an immediate success in restoring public confidence and stability to the banking system.

Detailed explanation-3: -The Deposit Insurance Corporation (DIC) Bill was introduced in the Parliament on August 21, 1961.

Detailed explanation-4: -IInitially, under the provisions of Section 16(1) of the DICGC Act, the insurance cover was limited to 1, 500/-only per depositor(s) for deposits held by him (them) in the “same right and in the same capacity” in all the branches of the bank taken together.

Detailed explanation-5: -A: FDIC deposit insurance protects bank customers in the event that an FDIC-insured depository institution fails. Bank customers don’t need to purchase deposit insurance; it is automatic for any deposit account opened at an FDIC-insured bank.