Hyderabad, Dec. 20 -- The Central Board of Directors of the Reserve Bank of India (RBI) on Friday approved a risk-based deposit insurance framework for banks, marking a shift fr0m the long-standing flat-rate premium system.

The decision was taken at the 620th meeting of the Central Board, held in Hyderabad under the chairmanship of RBI Governor Sanjay Malhotra.

The Board discussed the prevailing global and domestic economic situation and the associated challenges. It also reviewed the functioning of select Central Office departments and examined the draft Report on Trend and Progress of Banking in India, 2024-25.

The approval follows an RBI proposal announced in October to introduce a risk-based premium model as an alternative to the e...