RBI steps in to raise deposit insurance cover for customers from Rs 100,000

RBI asks arm to create model that'll make banks pay premiums depending upon their risk factor

The Reserve Bank of India (RBI) has told its subsidiary Deposit Insurance and Credit Guarantee Corporation (DICGC) to create a risk-based system for collecting premiums from banks to cover the deposit insurance of customers.

The RBI feels that a move to charge banks, depending upon how risky they are, is a prerequisite for hiking the bank deposit insurance limit of customers from Rs 1 lakh at present, a central bank executive said. According to sources, the central board of the RBI, which met in Chandigarh on October 11, had a detailed deliberation on the proposal to hike the deposit insurance