ICRA estimates that the revised deposit insurance norms can improve the RoA of strong banks with a long operating history by almost 4 bps. On a whole, banking sector is likely to witness RoA benefit of around 3 bps. Any rise in the deposit insurance limit would increase the premium payout of banks, impacting their profitability. Nevertheless, stronger banks, getting discounted rates under RBP framework, would be able to negate the impact. The Reserve Bank of India (RBI) released aRisk-based Premium Framework for Deposit Insurance in India on February 6, 2026. As per the risk-based premium (RBP) framework, Deposit Insurance and Credit Guarantee Corporation (DICGC; RBI’s subsidiary that insures bank deposits up to Rs. 5 lakh per depositor per institutions) will implement differential premium pricing instead of the current practice of a flat rate of 12 paise per Rs. 100 of assessable deposits (AD; i.e. eligible for DICGC insurance) for all banks.

Exhibit: Deposit market share of PSBs

Source: RBI, ICRA Research; PSB – Public sector banks; PVBs – Private sector banks; For bank names used in exhibits above, kindly refer to Annexure II