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Deposit Insurance, Digital Transformation, and Trust in Banking: A Statistical Analysis

Dr Rachita Ota* Dr Sushree Sangita Ray* & Mr. Sudhanshu Kumar**

*Asst. Professor, Amity Global Business School, Bhubaneswar

**Student, BBA, Amity Global Business School, Bhubaneswar

ABSTRACT

This study explores how deposit insurance influences consumer trust in banking institutions, focusing on both public and private sector banks in today’s rapidly evolving digital landscape. Despite the safety net provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), many consumers remain cautious, especially when it comes to small finance and cooperative banks. Through primary data collected from 111 respondents and supported by statistical analyses like Chi-Square, Correlation, and Regression, the research reveals a moderate connection between deposit insurance awareness and banking choices. However, significant trust gaps persist, particularly towards smaller banks, even when deposit insurance is in place. The study also highlights the critical role of effective communication from the Reserve Bank of India (RBI) in shaping public trust. Findings point to the need for stronger awareness efforts, improved financial education, policy enhancements, and more transparent digital communication to truly strengthen consumer confidence in the banking system. Ultimately, this research emphasizes the importance of bridging the gap between regulatory assurances and consumer perception to build a more stable and trusted banking environment.

Keywords: Deposit Insurance, Banking Institutions, Financial Awareness, Regulatory Communication, Digital Banking Transparency