Archive · 2 Jan 2026
RBI Approves Risk-Based Deposit Insurance Framework
The Reserve Bank of India has decided to change how banks pay for deposit insurance.
Instead of a flat fee, banks will now pay based on how risky they are.
This means safer banks will pay less, and riskier banks will pay more.
The goal is to make banks be more careful with money, which should make the banking system stronger.
The insurance coverage for small depositors will stay the same, but the new system is expected to make banks stronger and more trustworthy.
The RBI is still working out the details of how exactly the new premiums will be calculated.
RBI approved a shift from flat-rate to risk-based deposit insurance premiums for banks.
The new framework aims to incentivize better risk management and reduce moral hazard.
Currently, DICGC charges banks 12 paise per Rs 100 of assessable deposits.
The insurance coverage limit for depositors remains at 5 lakh for both principal and interest.
The new system is expected to enhance financial stability and public confidence in the banking system.
- Who
- Reserve Bank of India (RBI) and Deposit Insurance and Credit Guarantee Corporation (DICGC)
- What
- Shift from flat-rate to risk-based deposit insurance premium model for banks
- When
- Approved at the 620th meeting of the Central Board of Directors
- Where
- India
- Why
- To incentivize sound risk management practices and create a more resilient financial environment
- Current Premium Rate
- 12 paise per Rs 100 of assessable deposits
- Insurance Coverage Limit
- 5 lakh for both principal and interest
- Meeting Number
- 620th
- Author
- Rachana Baid
- Organisation
- Deposit Insurance and Credit Guarantee Corporation (DICGC)