Payment banks, which are a subset of banks that primarily provide basic financial services like deposits, payments, and remittances, tend to have a higher insured deposit ratio. This is because their focus is largely on offering basic services to a wide population, especially those in rural and semi-urban areas, where people often rely more on savings accounts with lower balances, which are fully covered by deposit insurance schemes.
In India, the Deposit Insurance and Credit Guarantee Corporation (DICGC) insures each depositor's account up to ₹5 lakh, and payment banks typically have a higher proportion of insured deposits compared to other types of banks, as they deal with smaller transaction sizes on average.
Study Notes
Category
