Sep 29, 2008

ICICI bank & Lehman - Is my money safe? deposits insured?

With many banks tanking badly these days, any one linked to the failing Banks in the US are also seen in suspicion. ICICI bank had invested $81 million in Lehman Brothers Seniors Bonds. And the news has been a big drag on ICICI's equity, but how about the depositor's money. The US banks do have FDIC insurance covering the deposits at the bank upto $100,000 for CDs and $250,000 for IRAs.

But how about the Indian ICICI Bank? Are the depositors covered by FDIC or any similar insurances? yes, the deposits at the ICICI bank are covered to an extent by an agency called DICGC (Deposit Insurance and Credit Gaurantee Corporation). Deposits of each depositor in a bank is insured upto a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him "in the same right and same capacity" 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. The Reserve Bank of India website talks more about this Deposit Insurance by DICGC here.

How do you if your bank is covered by DICGC? Well, visit the DICGC website and the site lists out all the banks covered by DICGC Insurance. The list includes ICICI bank as well.

Hoping that ICICI can withstand the turmoil and hope you are covered by the Insurance just in case of any eventuality.