RBI Approves Risk-Based Deposit Insurance Framework for Banks

On 19th December 2025, the Reserve Bank of India (RBI) approved a risk-based deposit insurance framework for banks at its 620th meeting, held in Hyderabad.

  • The framework aims to incentivise prudent banking behaviour and reduce moral hazard by rewarding well-managed institutions.

Deposit Insurance

  • Deposit insurance is a mechanism to protect bank depositors against the risk of bank failure.
  • In India, deposit insurance is administered by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the RBI.
  • Current System: All banks previously paid a flat premium of 12 paise per ₹100 of assessable deposits.
  • üThe central bank had earlier noted ....
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