Are your money deposited in banks safe?

 

Many investors have been extremely concerned about their money deposited in the bank since the scams at the PMC and Yes banks in the recent past and the scenes of crowdfunding and demonstrations in the bank to withdraw money from account holders. He wants to be assured whether his rupees deposited in the bank are safe or not. For some time, I have been worried about the condition of the investors who deposited their entire deposits in PMC Bank, but they were unable to withdraw money from the bank due to the withdrawal limit after the scam.

 

So it comes to mind repeatedly that our money deposited in banks is safe. Let us try to understand this problem.

 

There are different types of banks in India, such as public banks, private banks, foreign banks, several statewide co-operative banks and rural banks. While all the banks operating in the country come under the Reserve Bank and are governed by its guidelines, but the co-operative bank introduces less transparency in terms of managing the money of depositors and following the guidelines of the Reserve Bank. Give. Since most co-operative banks are in small spaces, they do not follow strict standards of money management. Apart from this, the heads of the co-operatives operate these banks and such people do not make any difference in their interests and the interest of the bank.

 

All the banks in this country are safe to say, because only rare incidents of bank failures come out. In view of the concern of depositors in small regional and co-operative banks, the Finance Minister recently announced to bring these banks under the Reserve Bank. In recent months, the Reserve Bank has shown special activity to monitor the irregularities of these banks and has cancelled the license of Goa-based Mapusa Co-operative Bank on the grounds that it neither had much capital nor was it better There was a possibility of economic performance, which could have an impact on the interests of the bank's depositors.

 

Apart from this, the central bank has put 40 co-operative banks under surveillance for poor financial condition and for not adhering to the prescribed standard. From time to time, the Reserve Bank also puts some banks under the purview of the PCA (Prompt Corrective Action) framework. This is done with banks that have less capital. Once a bank is placed under the purview of PCA, there is a restriction on its deposits or lending. This goes on until the bank's position improves.

 

Public sector banks like Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra in the last five years has come under the purview of PCA. Many of these banks are now outside the purview of PCA, yet it is not completely true that it is safe to keep money in banks.

 

All commercial banks, including branches of foreign banks operating in this country, local banks and regional rural banks are all insured by DICGC (Deposit Insurance and Credit Guarantee Corporation). This means that if a bank fails due to some reason, then its account holders will not lose five lakh rupees. That is, if you have two lakh rupees deposited in a bank and the bank closes, then you will get your rupees. The limit of the insured amount of the account holders was Rs 1 lakh till the beginning of this year, which has been increased to five lakh.