New Delhi: At a time when investors are reeling under the losses of the PMC Bank going bust all of a sudden, a photo of an HDFC passbook has gone viral on social media. It is actually a stamp bearing the name of DICGC — Deposit Insurance and Credit Guarantee Corporation.

It says: “The deposits of the bank are insured with DICGC and in case of liquidation of the bank, DICGC is liable to pay each depositor through the liquidator. The amount of his deposit up to rupees one lakh within 2 months from the date of claim list from the liquidator.”

The photo spread panic because it all comes down to this: No matter what amount lies in your bank account, if the bank goes bankrupt, then you get only Rs 1 lakh.

HDFC tweeted to rescue the situation and said that this stamp is more like a statutory warning. There is no reason to panic as the bank is not going bankrupts. This is according to an RBI circular in 2017 which mandated all banks, including small finance banks and payments banks, to incorporate information about deposit insurance cover along with the limit of coverage upfront in the passbook.

DICGC is a wholly owned subsidiary of the Reserve Bank of India. It came into existence in the ’70s. The concept of insuring deposits kept with banks received attention in 1848 during the banking crises in Bengal. Subsequently, the Deposit Insurance Corporation Bill was introduced in Parliament in 1961.

DICGC insures all deposits, including savings, fixed, recurring, etc. Each depositor is insured up to a maximum of Rs 1 lakh for both the principal and the interest amount held by him or her.

What if you have accounts in two banks that go bankrupt on the same day? You will get Rs 1 lakh from each of your accounts.

So yes, if your bank is going to be shut, you will receive only Rs 1 lakh. But the case in point is HDFC bank and there is no need to worry, as claimed by the bank.

But only Rs 1 Lakh? According to reports, the government is considering raiding the deposit guarantee limit from Rs 1 lakh as the amount was determined a long time ago. But it has to be done through Parliament.