In December 2025, the Central Board of Directors (BoD) of Reserve Bank of India (RBI) granted its approval for a risk-based deposit insurance framework for banks, transitioning from the existing premium charged to banks under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme.
- The decision was taken at the 620th meeting of Central BoD of RBI, chaired by Sanjay Malhotra, Governor of RBI, held in Hyderabad, Telangana.
- What? Approval for Risk-based Deposit Insurance Framework for banks
- Approved by: CBoDs of RBI
- Where? 620th meeting of CBoDs of RBI
- Chaired by: RBI Governor Sanjay Malhotra
- Implemented by: DICGC
- Current Premium Model: Flat-rate premium basis (since 1962)
- Under Which Act? DICGC Act, 1961
- Flat-rate Premium: 12 paise for every Rs 100 of assessable deposits
Key Details
Existing Structure: DIGC, established under the DICGC Act, 1961, has been operating the flat-rate premium-based deposit insurance scheme since 1962 i.e. currently, banks pay a premium of 12 paise for every Rs 100 of assessable deposits.
Key Change: The newly approved framework will replace the existing flat-rate premium followed by the banks with a risk-based structure which will enable banks with stronger capital adequacy, better asset quality to pay lower premia.
Other Key Highlights of Meeting:
Key Attendees: Apart from RBI Governor, the meeting was attended by Deputy Governors of RBI: T. Rabi Sankar, Swaminathan J., Poonam Gupta, Shirish Chandra Murmu.
- Also, others directors of Central Board that included Nagaraju Maddirala, Secretary of Department of Financial Services (DoFS), Ministry of Finance (MoF); Satish K. Marathe; Revathy Iyer; Pankaj Ramanbhai Ptel and Ravindra H. Dholakia.
Other Key Decisions: The CBoDs also reviewed the activities of select Central Office Departments and the draft Report on Trend and Progress of Banking in India, 2024-25.
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