RBI Deputy Governor Calls for Periodic Revision in Deposit Insurance Coverage

RBI Deputy Governor M Rajeshwar Rao emphasized the need for periodic upward revision of deposit insurance coverage, considering factors like deposit growth, inflation, and rising income levels. Speaking at the IADI Asia-Pacific Regional Committee Conference 2024, he highlighted the challenges and importance of ensuring adequate insurance for customer deposits.

In a significant move, RBI Deputy Governor M Rajeshwar Rao has called for a periodic upward revision of the current deposit insurance coverage limit, set at Rs 5 lakh, to align with the growth in deposits, inflation, and rising income levels.

Addressing the IADI Asia-Pacific Regional Committee International Conference 2024, Rao highlighted that as on March 31, 2024, 97.8% of accounts in India are fully protected, surpassing the international benchmark of 80%. However, he warned of potential future challenges.

Rao also brought attention to the diversity and complexity of the Indian banking sector, advocating for risk-based premium models to ensure the robustness of deposit insurance finances amid evolving risks.

(With inputs from agencies.)