Image used for representational purposes only. File
| Photo Credit: Reuters
The Central Board of Directors of Reserve Bank of India (RBI) has approved a risk-based deposit insurance framework for banks at its meeting in Hyderabad on Friday (December 19, 2025).
The approval follows the Central Bank’s statement in October, in which it had proposed a risk-based premium model. Mooted as an alternative to the existing flat rate premium-based deposit insurance scheme, the framework is expected to help banks that are more sound financially to save significantly on the premium paid.
Detailed notification will be issued shortly and the framework will be effective from next financial year, RBI had then said.
The Deposit Insurance and Credit Guarantee Corporation (DICGC) has been operating the flat rate premium-based deposit insurance scheme since 1962. Under the scheme, the banks are now charged a premium of 12 paise per ₹100 of assessable deposits.
“While the existing system is simple to understand and administer, it does not differentiate between banks based on their soundness. It is, therefore, proposed to introduce a Risk-Based Premium model,” RBI had said in the statement on multiple developmental and regulatory policy measures, including the proposed framework.
Besides approving the framework, the Central Board meeting, which was 620th such, discussed global and domestic economic situation and associated challenges. It also reviewed the activities of select Central Office Departments and the draft report on Trend and Progress of Banking in India, 2024-25.
The meeting was chaired by RBI Governor Sanjay Malhotra and attended by Deputy Governors T. Rabi Sankar, Swaminathan J., Poonam Gupta, Shirish Chandra Murmu and other directors of the Central Board — Nagaraju Maddirala, Secretary, Department of Financial Services; Satish K.Marathe, Revathy Iyer, Pankaj Ramanbhai Patel and Ravindra H. Dholakia, the apex bank said.
Published – December 19, 2025 07:08 pm IST
