Explainer: Why only 41.5% of Indian deposits are insured
India's deposit insurance coverage has dropped to just 41.5% this year—the lowest since 2020.
Even though people are keeping more money in banks (total deposits are now over ₹240 lakh crore), only ₹100 lakh crore is actually insured.
The DICGC still covers up to ₹5 lakh per person per bank, a limit that was raised from ₹1 lakh back in February 2020.
Who is insured and who isn't?
Most regular bank accounts (about 97.6%) are fully insured, but if you've got more than ₹5 lakh in the bank, anything above that isn't covered. This mostly affects big companies and wealthy individuals.
Public sector banks insure nearly half their deposits, private banks cover about a third, and regional rural banks protect almost 80%.
Also, there are fewer insured banks now than five years ago.
What's new in the insurance world?
Starting from the next financial year, the RBI will make banks pay insurance premiums based on how financially healthy they are, instead of a flat rate for everyone.
Meanwhile, the deposit insurance fund itself is growing—now at ₹2.28 lakh crore, with premium collections up 12% this year.