Insured bank deposits fall 9.5 percentage points in 5 years

While India's bank deposit base has expanded, the share of deposits protected by insurance has slipped. In the five years between September 2020 and March 2025, assessable deposits swelled by over Rs. 91 lakh crore, but the insurance coverage ratio dropped by 9.5 percentage points, leaving a wide gap between small savers who are fully covered and largevalue accounts that remain exposed.

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The ratio of insured deposits to assessable deposits had jumped to 50.92 per cent in 2020, when the Deposit Insurance and Credit Guarantee Corporation raised the eligibility limit for deposit insurance from Rs. 1 lakh to Rs. 5 lakh per bank. But the ratio has been slipping steadily since and currently stands at a five-year low of 41.5 per cent.

The decline appears to be CM YK mainly led by the increase in high-value deposits in the system.

The pandemic hit small businesses and the lower-income groups harder, making their savings dwindle even as wealthier entities witnessed growth in their assets. This widening income disparity is evident in bank deposits.