RBI Grade BNABARD ESISEBI
In one line
Source: TH
Context:
The RBI’s Central Board of Directors has approved a risk-based deposit insurance framework for banks during a meeting held in Hyderabad.
About the Risk-Based Deposit Insurance Framework
- Transition from the existing flat premium structure to a model where insurance premiums vary based on the financial risk profile of individual banks.
- Aim:
- Differentiated premium charges based on bank soundness
- Reduce burden on financially strong banks
- Encourage better risk management
- Detailed notification is expected soon, and the framework will become operational from the next financial year.
Existing System
- Operated by the Deposit Insurance and Credit Guarantee Corporation (DICGC) since 1962.
- Banks currently pay 12 paise per ₹100 of assessable deposits as insurance premium.
- Uniform charges apply to all banks irrespective of risk levels.
Why Change Was Needed?
RBI said the flat-rate model:
- Is simple but does not reward safer banks
- Fails to reflect differences in risk exposure
- Can lead to cross-subsidisation by stronger banks
The risk-based model will allow:
Free live session
NABARD Sprint 60: the 2025 cut-offs and your 60-day Phase I plan
8 of the top 10 in NABARD Grade A 2025, Rank 1 included, and Rank 1 back to back before that in 2021 and 2022: all prepared with C4S. The 2025 cycle was the toughest on record at every stage. This session reads those numbers properly and turns them into a 60-day, week-by-week plan for Phase I.
In 2 days · Sun, 11 Oct at 7:30 PM IST · 75 minutes · free
“RBI MPC Unpacked: Key Theory Meets Today’s Macro Trends”Tap to play · from the C4S channel
- Premium alignment with bank-specific risk
- Incentives for better governance
- Efficiency and fairness in the insurance system
