MUMBAI: The Reserve Bank has said it will replace the flat-rate deposit insurance premium with a risk-based framework from April, aiming to reward stronger banks and encourage better risk management and also lowering premium costs for stronger institutions. In a late Friday night statement, the Reserve Bank announced the introduction of a risk-based premium framework for deposit insurance, which will come into effect from April 1. The framework, which replaces the flat-rate premium system in place since 1962, will be reviewed at least once every three years. While the flat-rate system is easy to administer, it does not differentiate between banks based on their financial soundness. Under the new framework, banks will be classified into four risk categories—A, B, C and D— with category A representing the lowest risk.

Source: Indian Express February 07, 2026 18:11 UTC