Banks in the lowest risk category (A) pay a lower deposit insurance premium of 8 paise per year per deposit of Rs 100. As the risk increases, the deposit insurance premium will increase: Category B (10 paise per deposit of Rs 100), Category C (11 paise) and Category D (12 paise).
The proposal to introduce RBP for deposit insurance was approved by the Central Board of RBI on December 19, 2025.
DICGC currently charges a fixed premium rate [12 paise per ₹100 of assessable deposits]. RBI noted that the lump sum premium system is easy to understand and administer, but does not differentiate between banks that manage risks better.
DICGC Act, 1961, provides different premium rates for different categories of insured banks.
DICGC said that based on the risk assessment score obtained using the internal rating methodology, each bank will be divided into four groups namely A, B, C and D.
RBI said in a statement that there will be two risk assessment models: Tier 1 and Tier 2.
The Tier 1 model applies to Scheduled Commercial Banks other than Regional Rural Banks (RRBs), and is based on supervisory ratings, quantitative assessments (CAMELS parameters) and potential loss to the Deposit Insurance Fund (DIF) in the event of failure of insured banks.
The Tier 2 model, applicable to RRBs and cooperative banks, is based on quantitative assessment (CAMELS parameters) and potential loss to DIF in case of failure of insured banks.
The RBP framework also offers benefits of vintage (which means longer contributions to DICGC’s Deposit Insurance Fund without major issues or claims payouts from DICGC). A maximum Vintage incentive of up to 25 percent is provided.
The framework provides a policy for overriding ratings in the event of adverse material information/developments, following the initial risk assessment.
Local banks and payment banks continue to pay the premium at card rate (of 12 paise per ₹100 of deposit) as there are data point limitations to bringing them into an RBP model (they represent less than 1% of the premium collected).
All UCBs under RBI’s Supervisory Action Framework (SAF)/Prompt Corrective Action (PCA) will continue to pay the card rate of 12 paise and will be eligible for RBP from the financial year following the year in which the bank exits SAF/PCA.
The RBP framework will be revised at least once every three years.
Published on February 6, 2026
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