Deposit Insurance and Credit Guarantee Corporation Act, 1961
No: 47 Dated: Dec, 07 1961
THE DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION ACT, 1961
ACT NO. 47 OF 1961
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.
BE it enacted by Parliament in the Twelfth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.—(1) This Act may be called 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 and a subsidiary bank, but does not include the 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;
(dd) “co-operative bank” means a State co-operative bank, a Central co-operative bank and a primary co-operative bank;
(e) “Corporation” means the Deposit Insurance and Credit Guarantee Corporation established under section 3;
(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);
(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 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;
(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.
(g) “deposit” means the aggregate of the unpaid balances due to a depositor (other than a foreign Government, the Central Government, a State Government a corresponding new bank or a Regional Rural Bank or a banking company or a co-operative bank) in respect of all his accounts by whatever name called, 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 a Regional Rural Bank or a banking company or a co-operative bank at the commencement of this Act 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
(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;
(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;