The Reserve Bank of India will review the working of the bank deposit insurance scheme, including its coverage, to introduce international best practices.
The current status of deposit insurance must be reviewed in light of experience with the scheme and revision in the rates due next year, RBI Deputy Governor K J Udeshi told reporters on the sidelines of a seminar organised by Indian Banks' Association in Mumbai on Friday.
The review would also examine the international experience and practices, which could be introduced in the country, she said.
She did not comment whether the review would look at revision in the ceiling on deposit insurance.
Under the scheme, every depositor of an insured bank is entitled to repayment of deposits subject to a ceiling of Rs 100,000 when banking entity is liquidated or amalgamated.
Banking sources said with the downfall of many co-operative banks in the recent past affecting customers to a great extent, there has been a demand to hike the ceiling.
The insurance scheme was introduced in 1962 to provide coverage for deposits of commercial banks, regional rural banks and co-operative banks.
According to data available with Deposit Insurance and Credit Guarantee Corporation, 90 commercial banks, 196 RRBs and 2,298 cooperative banks are currently covered under the scheme.