Concerns over banks’ deposit insurance cover have increased lately, especially in view of the recent crisis at the Punjab and Maharashtra Co-operative Bank, or PMC. Now the question is how the Reserve Bank will build a better cushion for bank customers and also meet the increasing demand for capital.
For one, the RBI has decided that deposit insurance cover needs to be raised.
It has told its subsidiary, the Deposit Insurance and Credit Guarantee Corporation, to create a risk-based system for collecting premiums from banks to cover the deposit insurance of customers. To know more, listen to this podcast...