India markets closed

HDFC Bank clarifies after stamping passbooks with ‘deposit insurance cover’ raised concern

Amitava Chakrabarty
HDFC Bank, deposit insurance cover, Deposit Insurance and Credit Guarantee Corporation, DICGC, Reserve Bank of India, RBI, What is the maximum deposit amount insured by the DICGC

After an image containing an HDFC Bank passbook with the information on ‘deposit insurance cover’ stamped on it went viral on social media, creating some concerns among the depositors, the bank has issued a clarification on it. In its clarification, HDFC Bank has said that putting the stamp on those passbooks, which don’t have the information about ‘deposit insurance cover’ printed on it, is nothing but complying with the guidelines issued by the Reserve Bank of India (RBI).

The clarification issued by the HDFC Bank says, "This is with reference to an image of a passbook being circulated via WhatsApp and social media that seems to have caused some concern. This pertains to information about the deposit insurance cover. We’d like to clarify that the information has been inserted as per RBI circular dated June 22, 2017, which requires all Scheduled Commercial Banks, all Small Finance Banks and Payments Banks to "incorporate information about ‘deposit insurance cover’ along with the limit of coverage upfront in the passbook"."

It further says, "The passbooks without printed information have been stamped with the requisite information so as to be fully compliant with extant RBI guidelines."

As per the RBI guideline, banks covered by Deposit Insurance and Credit Guarantee Corporation (DICGC) have to incorporate in their passbook the information that the deposits are guaranteed by the DICGC and also that each depositor in the bank is insured up to a maximum of Rs 1,00,000 (Rupees One Lakh) for both principal and interest amount held by him/her in the same capacity and same right as on the date of liquidation / cancellation of bank’s licence or the date on which the scheme of amalgamation / merger / reconstruction comes into force.

As DICGC covers all commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks, all such banks have to disclose the fact and cover limit to their depositors. Except primary cooperative societies, cooperative banks are also covered by DICGC and need to make the disclosure in their passbooks too.