What happens to my money if the retail bank fails?

In India, the deposits of retail bank customers are protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC), which is a whollyowned subsidiary of the Reserve Bank of India (RBI). The DICGC provides insurance coverage for deposits held in all commercial banks, including retail banks.

Under the DICGC scheme, each depositor in a bank is insured up to a maximum amount of ₹5 lakh (including principal and interest) per bank, per depositor. This means that if a retail bank fails and is unable to repay its depositors, the DICGC will step in to compensate the depositors up to the insured amount.

It's important to note that the insurance coverage is per bank, not per account. So if you have multiple accounts in the same bank, the total insured amount for all your accounts in that bank will be ₹5 lakh.

However, it's also worth mentioning that bank failures are relatively rare, and regulatory authorities take various measures to prevent and resolve financial institution failures. The RBI closely monitors the financial health and stability of banks to minimize the risk of failure and to protect the interests of depositors.

If you have concerns about the safety of your deposits or want more information about the specific insurance coverage provided by the DICGC, it is advisable to contact your bank or refer to the DICGC's official website for detailed information and updates on deposit insurance coverage.