Q12: For a bank under liquidation, if a DICGC-insured deposit claim (e.g., 6 lakh) is more than the DICGC insurance cover (e.g., 5 lakh), how is the amount in excess of the cover (e.g., 1 lakh) handled?

The excess amount is forfeited by the depositor.

The DEA Fund pays the excess amount directly to the depositor.

The Liquidator pays the excess amount to the depositor first, and then claims reimbursement for that excess amount from the DEA Fund.

The Liquidator claims the excess amount from the DEA Fund first, and then pays the depositor.

✅ Correct Answer: C

If the deposit amount is more than the DICGC insurance cover, the Liquidator shall claim the excess amount only on a reimbursement basis.

This means the Liquidator must first pay the depositor and then submit a claim to the DEA Fund for reimbursement.

Bank Promotion Exam Guide