The Deposit Insurance and Credit Guarantee Corporation, on February 06, 2026, issued a notification regarding the implementation of the Risk-Based Premium (RBP) framework.
The following has been stated:
It has introduced a Risk-Based Premium (RBP) Framework effective from April 1, 2026, replacing the earlier flat premium system. Previously, all banks paid a uniform premium of 12 paise per ₹100 of assessable deposits annually, regardless of their risk profile. The new framework aims to incentivize better risk management by allowing well-managed banks to pay lower premiums.
Under the RBP system, banks will be evaluated using a two-tier risk rating methodology. Tier 1 applies to Scheduled Commercial Banks (excluding RRBs), while Tier 2 covers Regional Rural Banks and Cooperative Banks. The assessment is based on financial parameters such as capital adequacy, asset quality, liquidity, profitability, and governance factors, along with supervisory ratings and potential loss to the Deposit Insurance Fund.
Based on this evaluation, banks will be categorized into four risk groups—A, B, C, and D—with premium rates ranging from 8 to 12 paise per ₹100 deposits, where lower-risk banks (Category A) enjoy the highest discount. Additionally, a vintage incentive is introduced, rewarding banks with long, stable track records (up to 25% discount). The final premium payable (effective rate) will depend on both risk category and vintage benefits.
Certain banks, like Local Area Banks and Payments Banks, will continue paying the flat rate due to data limitations. Also, banks under regulatory stress (e.g., PCA/SAF) will not receive RBP benefits until recovery.
The framework includes provisions for rating overrides, strict confidentiality of ratings, and revised disclosure norms (banks only confirm payment, not the rate/category). Premium payments will be managed via DICGC’s “Samyak” system and must be paid within prescribed timelines.
Overall, this reform aligns deposit insurance premiums with the risk profile of banks, encouraging stronger financial discipline and stability in the banking system.
[Circular No. CO. DICG. lOD. No. S1803/04-01 -046/2025-2026]
