The Deposit Insurance and Credit Guarantee Corporation Act, 1961
Administered Ministry: Ministry of Finance / Department of Financial Services
Section
Section 30 Income-tax.
1[30. Income-tax--2[(1)] Notwithstanding anything contained in the Indian Income-tax Act, 1961 (43 of 1961), the Corporation shall not be liable to pay any tax under that Act on any of its incoming profits or gains for the accounting year during which the Corporation is established and for 3[fourteen accounting years following that year.]
4[(2) Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), the Corporation shall not be liable to pay any tax under that Act on any of its income, profits or gains for the period commencing from the first day of January, 1977, and ending with the commencement of the accounting year during which Chapter II of the Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act, 1978 (21 of 1978), comes into force and for four accounting years following that years.]
4[(2) Notwithstanding anything contained in the Income-tax Act, 1961 (43 of 1961), the Corporation shall not be liable to pay any tax under that Act on any of its income, profits or gains for the period commencing from the first day of January, 1977, and ending with the commencement of the accounting year during which Chapter II of the Deposit Insurance Corporation (Amendment and Miscellaneous Provisions) Act, 1978 (21 of 1978), comes into force and for four accounting years following that years.]
1. Subs. by Act 20 of 1967, s. 44, for section 30 (w.e.f. 1-4-1967).
2. Section 30 re-numbered as sub-section (1) thereof by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
3. Subs. by Act 32 of 1971, s. 53, for "nine accounting years" (w.e.f. 1-4-1971).
4. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
2. Section 30 re-numbered as sub-section (1) thereof by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
3. Subs. by Act 32 of 1971, s. 53, for "nine accounting years" (w.e.f. 1-4-1971).
4. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
Section 31 Reserve Fund.
After making provisions for all its liabilities and for all other matters for which provision is necessary or expedient, including any contribution to the staff and super annuation funds, the Corporation shall transfer the balance, if any, of its income in its General Fund to one or more reserve funds to be utilised in such manner and for such purposes as the Corporation may deem fit.
Section 32 Annual accounts and reports.
(1) The Corporation shall furnish to the Reserve Bank within three months from the date on which its accounts are balanced and closed the balance-sheet and accounts together with the auditor's report and a report of the working of the Corporation during the year and copies of the said balance-sheet and accounts and reports shall be furnished by the Corporation to the Central Government.
(2) The Central Government shall cause every auditor's report and report of the working of the Corporation to be laid 1[as soon as may be after they received before each House of Parliament 2***.
(2) The Central Government shall cause every auditor's report and report of the working of the Corporation to be laid 1[as soon as may be after they received before each House of Parliament 2***.
1. 5. Subs. by Act 1 of 1984, s. 63, for certain words (w.e.f. 15-2-1984).
2. The words ", while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions" omitted by Act 81 of 1985, s. 6 (w.e.f. 1-5-1986).
2. The words ", while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions" omitted by Act 81 of 1985, s. 6 (w.e.f. 1-5-1986).
Section 33 Staff of Corporation.
(1) The Corporation may appoint such number of officers and employees as it considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment and service.
(2) Without prejudice to the provisions of sub-section (1), it shall be lawful for the Corporation to utilise, and for the Reserve Bank to make available, the services of such staff of the Reserve Bank on such terms and conditions as may be agreed upon between the Corporation and the Reserve Bank.
(2) Without prejudice to the provisions of sub-section (1), it shall be lawful for the Corporation to utilise, and for the Reserve Bank to make available, the services of such staff of the Reserve Bank on such terms and conditions as may be agreed upon between the Corporation and the Reserve Bank.
Section 34 Returns from insured banks.
(1) Notwithstanding anything contained in 2[the Banking Regulation Act, 1949 (10 of 1949)] or any other law for the time being in force the Corporation may at any time direct an insured bank 1[or a credit institution] to furnish to it, within such time as may be specified by the Corporation, such statements and information relating to the deposits in that bank 1[or the credit facilities granted by that credit institution, as the case may be,] as the Corporation may consider necessary or expedient to obtain for the purposes of this Act.
(2) The Corporation may, if it considers it expedient and after consulting the Reserve Bank, publish any information obtained by it under this section in such consolidated form as it may think fit.
(2) The Corporation may, if it considers it expedient and after consulting the Reserve Bank, publish any information obtained by it under this section in such consolidated form as it may think fit.
1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
2. Subs. by Act 56 of 1968, s. 2, for "the Banking Companies Act, 1949" (w.e.f. 1-7-1971).
2. Subs. by Act 56 of 1968, s. 2, for "the Banking Companies Act, 1949" (w.e.f. 1-7-1971).
Section 35 Corporation to have access to records.
(1) The Corporation shall have free access to all such records of an insured bank 1[or a credit institution] perusal where of may appear to the Corporation to the necessary for the discharge of its functions under this Act.
(2) The Corporation may require any insured bank 1[or credit institution] to furnish to it copies of any of the records referred to in sub-section (1) and the bank 1[or the credit institution] shall be bound to comply with the requisition.
(2) The Corporation may require any insured bank 1[or credit institution] to furnish to it copies of any of the records referred to in sub-section (1) and the bank 1[or the credit institution] shall be bound to comply with the requisition.
1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
Section 36 Inspection of insured banks by Reserve Bank.
(1) The Corporation may for any of the purposes of this Act request the Reserve Bank to cause an inspection of the books and accounts or an investigation of the affairs of an insured bank 1[or a credit institution] to be made and on such request the Reserve Bank shall cause such inspection or investigation to be made by one or more of its officers 2[or through such other person or agency as the Reserve Bank may determine.]
(2) The provisions of sub-section (2) and sub-section (3) of section 35 of 3[the Banking Regulation Act, 1949 (10 of 1949)] shall apply to an inspection or investigation under sub-section (1) as they apply to an inspection under that section.
(3) When an inspection or investigation has been made under this section, the Reserve Bank shall furnish a copy of its report to the Corporation and 4[neither the bank nor the credit institution, as the case may be, inspected or investigated, nor any other bank or credit institution] shall be entitled to be furnished with a copy of such report.
(4) Notwithstanding anything contained in any law for the time being in force, no court, Tribunal or other authority shall compel the production or disclosure of a report under this section or of information or material gathered during the course of an inspection or investigation under this section.
(2) The provisions of sub-section (2) and sub-section (3) of section 35 of 3[the Banking Regulation Act, 1949 (10 of 1949)] shall apply to an inspection or investigation under sub-section (1) as they apply to an inspection under that section.
(3) When an inspection or investigation has been made under this section, the Reserve Bank shall furnish a copy of its report to the Corporation and 4[neither the bank nor the credit institution, as the case may be, inspected or investigated, nor any other bank or credit institution] shall be entitled to be furnished with a copy of such report.
(4) Notwithstanding anything contained in any law for the time being in force, no court, Tribunal or other authority shall compel the production or disclosure of a report under this section or of information or material gathered during the course of an inspection or investigation under this section.
1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
2. Ins. by Act 56 of 1968, s. 12 (w.e.f. 1-7-1971).
3. Subs. by s. 2, ibid., for "the Banking Companies Act, 1949" (w.e.f. 1-7-1971).
4. Subs. by Act 21 of 1978, s. 8, for certain words (w.e.f. 15-7-1978).
2. Ins. by Act 56 of 1968, s. 12 (w.e.f. 1-7-1971).
3. Subs. by s. 2, ibid., for "the Banking Companies Act, 1949" (w.e.f. 1-7-1971).
4. Subs. by Act 21 of 1978, s. 8, for certain words (w.e.f. 15-7-1978).
Section 37 Corporation to furnish information to Reserve Bank.
The Corporation shall, one a request in writing from the Reserve Bank, furnish to it within such time as may be specified by the Reserve Bank, such statement and information relating to the business or affairs of the Corporation or of an insured bank as the Reserve Bank may consider necessary or expedient.
Section 38 Reserve Bank to furnish information to Corporation.
The Reserve Bank shall, on a request in writing from the Corporation, furnish to it any report or information relating to an insured bank 1[or a credit institution] made or obtained by it under or in pursuance of the Reserve Bank of India Act, 1934 or 2[the Banking Regulation Act, 1949 (10 of 1949).]
1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
2. Subs. by s. 2, ibid., for "the Banking Companies Act, 1949" (w.e.f. 1-7-1971).
2. Subs. by s. 2, ibid., for "the Banking Companies Act, 1949" (w.e.f. 1-7-1971).
Section 39 Declaration of fidelity and secrecy.
2[(1)] Every director, auditor, officer or other employee of the Corporation or an employee of the Reserve Bank whose services are utilised by the Corporation under sub-section (2) of section 33 shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule to this Act.
1[(2) The Corporation shall observe, except as otherwise required by law, the practices and usages customary among the bankers, and, in particular, it shall not divulge any information relating to an insured bank or its customers or a credit institution or its customers except in circumstances in which it is, in accordance with law or practices or usages customary among bankers, necessary or appropriate for the Corporation to divulge such information.]
3[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies (Regulation) Act, 2005.]
1[(2) The Corporation shall observe, except as otherwise required by law, the practices and usages customary among the bankers, and, in particular, it shall not divulge any information relating to an insured bank or its customers or a credit institution or its customers except in circumstances in which it is, in accordance with law or practices or usages customary among bankers, necessary or appropriate for the Corporation to divulge such information.]
3[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies (Regulation) Act, 2005.]
1. Ins. by Act 21 of 1978, s. 8 (w.e.f. 15-7-1978).
2. Section 39 re-numbered as sub-section (1) thereof by s. 8, ibid. (w.e.f. 15-7-1978).
3. Ins. by Act 30 of 2005, s. 34 and the Schedule (w.e.f. 14-12-2006).
2. Section 39 re-numbered as sub-section (1) thereof by s. 8, ibid. (w.e.f. 15-7-1978).
3. Ins. by Act 30 of 2005, s. 34 and the Schedule (w.e.f. 14-12-2006).
Section 40 Indemnity of directors.
(1) Every director of the Board shall be indemnified by the Corporation against all losses and expenses incurred by him in, or in relation to, the discharge of his duties except such as are caused by his own willful act or default.
(2) A director of the Board shall not be responsible for any other director or for any other officer or other employee of the Corporation, or for any loss or expenses resulting to the Corporation from the insufficiency or deficiency of value of or title to any property or security acquired or taken on behalf of the Corporation or the insolvency or wrongful act of any debtor or any person under obligation to the Corporation or anything done in good faith in the execution of the duties of his office or in relation thereto.
(2) A director of the Board shall not be responsible for any other director or for any other officer or other employee of the Corporation, or for any loss or expenses resulting to the Corporation from the insufficiency or deficiency of value of or title to any property or security acquired or taken on behalf of the Corporation or the insolvency or wrongful act of any debtor or any person under obligation to the Corporation or anything done in good faith in the execution of the duties of his office or in relation thereto.
Section 41 Defects in appointment not to invalidate acts, etc.
(1) No act or proceeding of the Board or of any committee of the Corporation shall be questioned on the ground merely of the existence of any vacancy or defect in the constitution of the Board or committee.
(2) No act done by any person acting in good faith as a director of the Board shall be deemed to be invalid merely on the ground that he was disqualified to be a director or that there was any other defect in his appointment.
(2) No act done by any person acting in good faith as a director of the Board shall be deemed to be invalid merely on the ground that he was disqualified to be a director or that there was any other defect in his appointment.
Section 42 Protection of action taken under this act.
No suit other legal proceeding shall lie against the Corporation or the Reserve Bank or any director of the Board or any officer of the Corporation or the Reserve Bank or 1[or any other person or agency authorised by the Corporation or the Reserve Bank] to discharge any functions under this Act for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act.
1. Subs. by 56 of 1968, s. 13, for "or any other person authorised by the Corporation" (w.e.f. 1-7-1971).
Section 43 Companies Act, 1956 and insurance act, 1938 not to apply.
Nothing in the Companies Act, 1956 (1 of 1956) or the Insurance Act, 1938 (4 of 1938), shall apply to the Corporation.
Section 43A Powers of Reserve Bank not to apply to International Financial Services Centre.
1[43A. Powers of Reserve Bank not to apply to International Financial Services Centre.-- Notwithstanding anything contained in any other law for the time being in force, the powers exercisable by the Reserve Bank under this Act,
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of section of the Special Economic Zones Act, 2005 (28 of 2005);
(b) shall be exercisable by the International Financial Services Centres Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019, in so far as regulation of financial products, financial services and financial institutions that are permitted in the International Financial Services Centres are concerned.]
(a) shall not extend to an International Financial Services Centre set up under sub-section (1) of section of the Special Economic Zones Act, 2005 (28 of 2005);
(b) shall be exercisable by the International Financial Services Centres Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019, in so far as regulation of financial products, financial services and financial institutions that are permitted in the International Financial Services Centres are concerned.]
1. Ins. by Act 50 of 2019, s. 33 and the second Schedule (w.e.f. 1-10-2019)
Section 44 Liquidation of Corporation.
(1) The Corporation shall not be placed in liquidation save by order of the Central Government and in such manner as that Government may direct.
(2) On the liquidation of the Corporation--
(a) the outstanding assets of the Corporation in so far as they relate to the Deposit Insurance Fund shall be distributed among the insured banks in such manner and in such proportion as may be determined by the Central Government having regard to the amounts of premium paid by them during any prescribed period or the deposits of the said banks as on the date of liquidation of the Corporation or other relevant circumstances;
(b) the remaining outstanding assets of the Corporation shall be transferred to the Reserve Bank.
(2) On the liquidation of the Corporation--
(a) the outstanding assets of the Corporation in so far as they relate to the Deposit Insurance Fund shall be distributed among the insured banks in such manner and in such proportion as may be determined by the Central Government having regard to the amounts of premium paid by them during any prescribed period or the deposits of the said banks as on the date of liquidation of the Corporation or other relevant circumstances;
(b) the remaining outstanding assets of the Corporation shall be transferred to the Reserve Bank.
Section 45 Power of Central Government to give directions.
In the discharge of its functions under this Act, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may after consulting the Reserve Bank give to it in writing, and if any question arises whether the directions relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.
Section 46 Dispute as to amount of premium.
Any dispute as to the amount of premium due from any insured bank shall be decided by the Central Government and the decision of that Government shall final.
Section 47 Penalties.
(1) Whoever in any return, balance-sheet or other document or in any information required or furnished by or under or for the purposes of any provision of this Act, willfully makes a statement which is false in any material particular, knowing it to be false, or willfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.
1[(2) If any person fails to produce any book, account or other document or to furnish any statement or information which, under the provisions of this Act, it is his duty to produce or furnish, he shall be liable to penalty which may extend to one lakh fifty thousand rupees in respect of each failure, and in the case of a continuing failure, with an additional penalty which may extend to seven thousand five hundred rupees for every day during which the failure continues after the first such failure.
(3) For the purpose of adjudging the penalty under sub-section (2), the Corporation shall serve notice on the person requiring it to show cause why the amount specified in the notice should not be imposed and a reasonable opportunity of being heard shall also be given to such person.
(4) Any penalty imposed by the Corporation under this section shall be payable within a period of fourteen days from the date on which notice issued by the Corporation demanding payment of the sum is served on the person and in the event of failure of the person to pay the sum within such period, may be levied on an order or direction made by the principal civil court having jurisdiction in the area where the person is situated:
Provided that no order or direction shall be made except on an application made to the court by the Corporation or any officer authorised by it in this behalf.
(5) The court which makes an order or direction under sub-section (4) shall issue a certificate specifying the sum payable by the person and every such certificate shall be enforceable in the same manner as if it were a decree made by the court in a civil suit.
(6) No complaint shall be filed against any person in any court of law in respect of any contravention or default in respect of which any penalty has been imposed by the Corporation under sub-section (2).
(7) Where any complaint has been filed against any person in any court in respect of any contravention or default of the nature referred to in sub-section (1), then, no proceedings for the imposition of any penalty on the person shall be initiated under sub-section (2).]
1[(2) If any person fails to produce any book, account or other document or to furnish any statement or information which, under the provisions of this Act, it is his duty to produce or furnish, he shall be liable to penalty which may extend to one lakh fifty thousand rupees in respect of each failure, and in the case of a continuing failure, with an additional penalty which may extend to seven thousand five hundred rupees for every day during which the failure continues after the first such failure.
(3) For the purpose of adjudging the penalty under sub-section (2), the Corporation shall serve notice on the person requiring it to show cause why the amount specified in the notice should not be imposed and a reasonable opportunity of being heard shall also be given to such person.
(4) Any penalty imposed by the Corporation under this section shall be payable within a period of fourteen days from the date on which notice issued by the Corporation demanding payment of the sum is served on the person and in the event of failure of the person to pay the sum within such period, may be levied on an order or direction made by the principal civil court having jurisdiction in the area where the person is situated:
Provided that no order or direction shall be made except on an application made to the court by the Corporation or any officer authorised by it in this behalf.
(5) The court which makes an order or direction under sub-section (4) shall issue a certificate specifying the sum payable by the person and every such certificate shall be enforceable in the same manner as if it were a decree made by the court in a civil suit.
(6) No complaint shall be filed against any person in any court of law in respect of any contravention or default in respect of which any penalty has been imposed by the Corporation under sub-section (2).
(7) Where any complaint has been filed against any person in any court in respect of any contravention or default of the nature referred to in sub-section (1), then, no proceedings for the imposition of any penalty on the person shall be initiated under sub-section (2).]
1 Subs. by Act 18 of 2023, s. 2 and Schedule for sub-section (2) (w.e.f. 22-01-2024)
Section 48 Offences by companies.
(1) Where an offence has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any gross negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section,--
(a) "company" means any body corporate and includes 1[a co-operative society or] a firm or other association of individuals; and
(b) "director" in relation to a firm, means a partner in the firm 1[and in relation to a co-operative society includes any member of a committee of management or other managing body (by whatever name called) to which the management of the affairs of the bank is entrusted].
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any gross negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.--For the purposes of this section,--
(a) "company" means any body corporate and includes 1[a co-operative society or] a firm or other association of individuals; and
(b) "director" in relation to a firm, means a partner in the firm 1[and in relation to a co-operative society includes any member of a committee of management or other managing body (by whatever name called) to which the management of the affairs of the bank is entrusted].
1. Ins. by Act 56 of 1968, s. 14 (w.e.f. 1-7-1971).