Budget 2020: Bank's deposit insurance premia to rise by over Rs 28,000 cr

Bankers say move will not dent their balance sheets significantly, but will take up the matter with RBI, which they say can share some of the burden

The hike in insurance cover for deposits to Rs five lakh from Rs one lakh will entail a rise over Rs 28,000 crore in premium to be paid by banks, according to foreign brokerage Credit-Suisse.

Banks paid a combined insurance premium of Rs 12,043 crore in 2018-19 to the Deposit Insurance and Credit Guarantee Corporation, (DICGC), up from Rs 11,128 crore paid in 2017-18. DICGC is a subsidiary of the Reserve Bank of India.

At present, banks pay 10 paise as premia for per deposit of Rs 100. The last revision in premium was done in 2005. Earlier, bank used