Existing cap for deposit insurance cover may stay

HE STATED THAT “while the existing system is simple to understand and administer, it does not differentiate between banks based on their soundness.

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It is, therefore, proposed to introduce a risk-based premium model, which will help banks that are more sound to save significantly on the premium paid”

“The current system means strong entities contribute significantly, effectively subsidising payouts for smaller, struggling banks. The new model aims for a more equitable contribution based on risk,’ said a banker froma PSU bank.