Question
Under the existing deposit insurance system in India
(introduced in 1962), banks pay a flat premium of how much per ₹100 of assessable deposits?Solution
The flat-rate deposit insurance system introduced in 1962 charges banks a premium of 12 paise per ₹100 of assessable deposits. The RBI has now approved a shift to a risk-based deposit insurance framework, which will differentiate premiums based on banks’ financial strength.
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