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I have mentioned this issue to multiple fintech entrepreneurs in India that they can launch a private fdic like insurance. They can charge different premiums fo
by ashishb 7y ago
I have mentioned this issue to multiple fintech entrepreneurs in India that they can launch a private fdic like insurance. They can charge different premiums for each bank effectively producing health ratings for those banks.
- toast0 7y agoPrivate depository insurance is possible, but what makes the FDIC insurance feel secure is that it's a promise from the government to pay, and the government has 'unlimited' dollars to pay with. Additionally FDIC membership is basically compulsory for US banks, and the FDIC has the authority to shut down a bank in case it's unsound. I don't see how a private insurer would inspire the same confidence. The amount of reserves would have to be huge, and verified. Somehow, the insurer would need to be able to quickly wrest control over a troubled bank. And that's assuming the bank doesn't stop paying the insurance and 'forget' to update its website.
- captn3m0 7y agoAny faults with the DICGC approach? They do publish details about premiums in the annual reports (last report is still pending, sadly)
- ashishb 7y agoThe amount insured by DICGC is only 5 lakh (500K) INR which is nothing.