India’s deposit insurance system continued to play a crucial role in protecting cooperative bank depositors, with the Deposit Insurance and Credit Guarantee Corporation (DICGC) settling claims worth Rs 1,988 crore during 2025-26. The entire payout related to 72 Urban Cooperative Banks (UCBs) that were either liquidated or placed under all-inclusive directions.
According to the RBI Annual Report 2025-26, cooperative banks account for the overwhelming majority of institutions covered under the deposit insurance scheme. As of March 31, 2026, DICGC insured 1,826 cooperative banks, including 1,440 UCBs, 34 State Cooperative Banks (StCBs) and 352 District Central Cooperative Banks (DCCBs), out of a total of 1,950 insured banks in the country.
In a significant development for the cooperative banking sector, the RBI has introduced a Risk-Based Premium (RBP) Framework for deposit insurance with effect from April 1, 2026. Under the new system, Urban Cooperative Banks, Rural Cooperative Banks and Regional Rural Banks will be assessed under a separate Tier-II framework.
Better-managed cooperative banks will pay lower insurance premiums than the existing flat rate of 12 paise per Rs 100 of assessable deposits, providing an incentive for stronger governance and risk management.
The Deposit Insurance Fund reached a record Rs 2.62 lakh crore as of March 31, 2026, registering a year-on-year growth of 14.4 per cent. The report also noted that 97.5 per cent of all deposit accounts in India remain fully protected up to the insurance limit of Rs 5 lakh per depositor.