New Delhi, Feb. 19 -- The Reserve Bank of India's newly introduced Risk-based Premium (RBP) Framework for deposit insurance is expected to enhance profitability for stronger banks while incentivising improved risk management practices across the banking sector, according to an ICRA report.

The framework, released on February 6, 2026, replaces the existing flat premium rate of 12 paise per Rs. 100 of assessable deposits (AD) with a differential pricing structure. Under the revised system, banks will be categorised based on risk scores derived from the Deposit Insurance and Credit Guarantee Corporation's (DICGC) internal rating methodology. Stronger banks with better risk profiles will pay lower premiums, while weaker banks will face highe...