Skip to content
Free updates Login
BankingUPSC & State PSCNABARD / RBI

Deposit Insurance Premium Turns Risk-Based for Banks

23 February 20261 min read
BANKING & FINANCEDeposit InsurancePremium TurnsRisk-Based forBanks23 February 2026safalsetu.com

Why in the news

Bank premiums will now reflect risk, and cover may be raised.

Key facts

  • Insurer: DICGC (1962).
  • Cover: ₹5 lakh per depositor per bank; may become about ₹15 lakh.
  • New regime: better-rated banks pay less; riskier banks pay near the ceiling.

Proposed premium (per ₹100 deposits)

RatingPremium
A8 paise
B10 paise
C11 paise
D12 paise (cap)

Two tiers

TierBanks
Tier IScheduled commercial banks except RRBs
Tier IIRegional Rural Banks and cooperative banks

Exam angle

  • Cap rate: 12 paise.
  • Lowest rate: Rating A.

Test yourself

1. What was the flat deposit insurance premium paid by all banks earlier?

The earlier uniform premium was 12 paise per ₹100 of deposits.

2. Under the proposed risk-based premium, which rating pays the lowest premium?

Rating A banks pay 8 paise per ₹100.

3. Which banks fall under Tier II of the proposed two-tier premium framework?

Tier II covers Regional Rural Banks and cooperative banks.

This topic is part of Daily Current Affairs 22 & 23 February 2026 (15 topics).

All topics of the dayDay quizFebruary 2026

Read more