RBI to roll out risk-based deposit insurance coverage in April – The Instances of India – Company Technique & Outlook

MUMBAI: Banks will quickly value deposit insurance coverage by danger, whereas depositor safety stays unchanged. From April 1, 2026, RBI will undertake risk-based pricing for deposit insurance coverage, a worldwide norm, with out altering protection or payouts. Till now, all banks paid a flat premium of 12 paise per Rs 100 of deposits, no matter monetary energy. The brand new framework reverses this. Stronger stability sheets and tighter danger controls can pay much less, whereas weaker banks can pay extra. The design rewards prudence. Properly-run banks can minimize premiums by as much as 33% based mostly on danger metrics, with a further discount of as much as 25% for a protracted, stress-free contribution document to the insurance coverage fund. Banks with weaker funds or governance can pay nearer to, or above, the usual charge, sharpening incentives to enhance asset high quality and controls.Depositors will see no change. Insurance coverage cowl will stay capped at Rs 5 lakh per depositor per financial institution, with payout guidelines and timelines unchanged. Banks might be barred from disclosing their danger scores or premiums, stopping any official classification of banks as secure or dangerous. Threat evaluation will draw on supervisory inputs and indicators overlaying capital, asset high quality, earnings, administration and liquidity, with scope for overrides after antagonistic developments. Some lenders will stay exterior the system for now.