RBI Deposit Insurance May Shift to Risk-Based Model

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  • Last Updated on 4 October, 2025

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Risk-based deposit insurance premiums RBI

Press Release: 2025-2026/1218, Dated: 01.10.2025

1. Introduction

The Reserve Bank of India (RBI) has released its Statement on Developmental and Regulatory Policies, setting out a range of measures aimed at strengthening financial stability, enhancing consumer protection, and improving the efficiency of financial markets. These proposals, announced alongside the Monetary Policy review, reflect the RBI’s continued efforts to align regulations with the evolving needs of the economy and promote sustainable growth.

2. Regulatory Measures and Risk-Based Premium

One of the key proposals is the introduction of a Risk-Based Premium model for banks. Under the existing system, banks pay a uniform premium regardless of their financial health. The new model seeks to differentiate based on the soundness and risk profile of banks, ensuring that stronger institutions benefit from lower premium payments. This will incentivize prudent risk management practices and encourage banks to maintain robust financial positions.

3. Financing of Corporate Acquisitions

The RBI has also proposed to allow banks greater flexibility in financing acquisitions undertaken by Indian corporates. This framework aims to support the expansion and competitiveness of domestic companies, enabling them to participate in strategic investments and mergers. By easing access to acquisition financing, the RBI intends to enhance the role of banks in driving corporate growth and boosting India’s global footprint.

4. Enhancing Lending Limits Against Securities

Another significant measure includes the enhancement of limits for lending by banks against shares, units of Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InvITs). This move is expected to improve liquidity in capital markets, provide corporates and investors with more financing avenues, and strengthen the integration of banking with capital market activities. It also reflects the regulator’s confidence in the growing depth and resilience of India’s financial markets.

5. Conclusion

In conclusion, the RBI’s latest set of developmental and regulatory proposals highlight its proactive approach to balancing financial stability with market development. The Risk-Based Premium model, expanded corporate financing options, and enhanced lending against securities are all steps that seek to strengthen the banking sector while supporting India’s economic growth. Going forward, the implementation of these measures will play a crucial role in ensuring that the financial system remains robust, resilient, and responsive to the needs of a dynamic economy.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied