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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

RBI issues a press release on Risk-based Premium Framework for Deposit Insurance in India

06-Feb-2026 | Press Release: 2025-2026/2067

RBI has issued a press release on the Risk-based Premium Framework for Deposit Insurance in India.

Through this press release, DICGC has advised the insured banks on the implementation of Risk Based Premium (RBP) framework, with the approval of the RBI. The framework aims to incentivise sound risk management by banks and reduce premium to be paid by better-rated banks.

Key Highlights:
1. There are two risk assessment models - the Tier 1 Model and Tier 2 Model. Tier 1 Model applies to Scheduled Commercial Banks other than Regional Rural Banks (RRBs), and Tier 2 Model applies to RRBs and cooperative banks.
2. The maximum Risk-model incentive is 33.33% over the card rate.
3. The banks are required to maintain the confidentiality of ratings and not to disclose ratings or the amount of premium paid to DICGC.
4. All UCBs under the Supervisory Action Framework (SAF)/Prompt Corrective Action (PCA) of RBI have to pay the card rate of 12 paise and are for RBP from the financial year following the year in which the bank exits SAF/PCA.
5. This framework is effective from April 1, 2026 and will be reviewed at least once every three years.

Kindly refer to the attached document for more information.

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