The Deposit Insurance and Credit Guarantee Corporation (DICGC) will implement the Risk-Based Premium (RBP) framework from 1st April 2026, which will differentiate banks based on their risk management systems.
Under the RBP framework, banks will be assigned a risk assessment score, and based on the score, they will be placed in one of four risk categories: A, B, C, and D.
Banks in Category A will pay a lower premium of Rs. 0.08 per Rs. 100 of assessable deposits, translating into a 33.33% discount.
The RBP framework will also provide a vintage benefit, where banks can earn a discount of up to 25% for their longer premium contribution to DICGC's Deposit Insurance Fund without any major stress events or DICGC claim payouts.
The total discount on premium that a bank will get will be a function of the rating category discount and vintage incentive.
The RBP framework is expected to help banks with sound risk management systems save a significant amount on deposit insurance premiums outgo every year, which will shore up their profitability.
The framework will also encourage weaker banks to strengthen their risk management systems to qualify for a discount on the deposit insurance premium payable.
The DICGC will review the RBP framework at least once in three years.
