Are Banks Really Safe Heaven

By Zeya Qamar

This is Zeya Qamar for depositors’ money safety. I would like to cover the concern of a common man’s hard-earned money or depositors’ money safety, which seems not to be safe in the locker of the banks due to the recent collapse of many banking systems in India. It has completely shaken the belief in the safety of their liquid assets and people are worried that if banks are really safe heaven?

A banking system for depositors’ money safety is considered to be highly organized for many decades. The whole ecosystem of the banking process in India is governed by the regulatory body, RBI, under whose purview the bank’s financial health comes. The role of the bank for a common man is to provide safety and security for their hard-earned surplus money since keeping the money in their houses is considered not to be safe due to theft and robbery, so the government encourages people to keep their money in the bank and enjoy mental peace and interest on their savings. The bank lends these monies to the investors and borrowers at a higher interest rate on which the bank’s financial system revolves.

The investors invest these monies either to form a new company or to expand their business which ultimately creates job opportunities. But here is the catch, when the borrowers didn’t return the money to the bank on time. It is considered as NPA causing concerns for Depositors money safety when the interest amount is not returned to the bank in 90 days. If we take the recent cases of the collapse of PUNJAB AND MAHARASHTRA BANK in which the account holders have been instructed to withdraw the money of only 10000 in the next 6 months which was heart-wrenching to all pertaining to the various necessities. Due to this shocking development few cases of death too were reported.

Recently, Yes Bank, which is the 4th largest private bank whose moratorium came in gave a tizzy to the account holders. State Bank Of India has to intervene in between to save the bank from collapse and restore the faith of the people, which is a good sign and the good news is that Yes Bank is expected to bounce back and restart the operation soon. I would not like to go into the details of who played the spoilsport.

The crux of such failures of the banking system is doubted on the integrity between the various dubious chains involved in running the Banks which includes the collusion between the government and the corporate borrowers.

 The RBI must intervene to check the financial health and balance sheet of all the banks so that the account holder’s money must be safe at all costs and no such cases like the fraudsters Neerav Modi, Mehul Choksi, Jatin Mehta, and Vijay Mallaya could take place in the future.

Thanks for reading.

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