BANKING AFFAIRS

Detailed explanation-1: -The Deposit Insurance Corporation (DIC) Bill was introduced in the Parliament on August 21, 1961 and received the assent of the President on December 7, 1961. The Deposit Insurance Corporation commenced functioning on January 1, 1962 . The Deposit Insurance Scheme was initially extended to functioning commercial banks.

Detailed explanation-2: -A deposit is money held in a bank account or with another financial institution that requires a transfer from one party to another. A deposit can can also be the amount of money used as security or collateral for delivery of goods or services.

Detailed explanation-3: -The role of deposit insurance is to stabilize the financial system in the event of bank failures by assuring depositors they will have immediate access to their insured funds even if their bank fails, thereby reducing their incentive to make a “run” on the bank.

Detailed explanation-4: -India Code: Deposit Insurance and Credit Guarantee Corporation Act, 1961. Long Title: An Act to provide for the establishment of a corporation for the purpose of insurance of deposits and guaranteeing of credit facilities and for other matters connected therewith or incidental thereto.