At the household level, such "double triggers" may induce defaults because of cash flow constraints or because continuing to make payments on a mortgage whose balance significantly exceeds the value of the house is more difficult to justify when the family budget is strained.
For maintaining depositor confidence, the fund is required to be robust enough to meet claims arising out of routine failure of banks under normal situations. Going by the past record of failures, the fund maintained by DICGC appears adequate.