take this as hypothetical situation.. An employee who makes say 50 K per month. Would pay taxes around 10-12K , and save 20 k per month after exp and he does it for 20 years. So net savings minus interest is roughly 25L. And bank failed., So govt will give him 1L ? And this guy is near his retirement !! So is this really an insurance which does not take account of future value,inflation, market conditions...I would say this is completely biased in protecting the bank..Second this insurance should be revised, I think this was written by Nehru.
I am enlightened by this article.. going to start a bank !!! c ya
ICICI,SBI and others are Playing New Game Credit card against Fixed Deposits their Tantra are- Eg- your FD of Rs-10,000/- you EMI- Rs 1200 (Rs-899 X 11 EMI)= 11089/- Interest paid 7.5% of Principle 10K = 750.00 Net Profit Rs 339/- FD-utilized to issue a term loans- Rs-7000/ collected interest @12.5% for 7 month Rs-510.00 Total Profit Rs-849.00 from one account min of 10k, if with 5 lakh a/c- net Profit Rs-42,45,00,000.00
Pls.Note Interest collected during your Card transaction ( Interest,Late fee,unpaid bal fee etc)is considered as Operating Expenses,
Ms Pratibha Patils family is accused of amassing wealth in this very fashion, the co-op bank that her family/husband used to run, closed down after giving out loans to their own people. This is what is alleged!
The depositor is left high and dry when the bank fails.The insurance cover isonly for Rs 1.00 L. That too, includes all deposits in the bank of that individual.
Since insurance on deposit is limited to Rs 1.00 L, the bank must not acept deposits over this amount.
Also, there must be two cateogories of deposits: one at normal interest rate and the other at higher rates.The cover must be 100% of the deposits for the first category.The second category can be restricted to some quota because they have opted for higher and riskier rates.
Recently, I had about 75000 deposits with South Indian Co-op bank, Mumbai and it failed because of reckless loans to Directors but got no repayments.To get my money back it took 2 years and that too without interest. Neither RBI or Govt helped.
Re: Deposit insurance
by asli mumbaikar on Nov 12, 2009 05:13 PM
The depositor can also insure his deposits over 1.00 L at his cost if it is at higher rates.
Re: Re: Deposit insurance
by SUJEESH NARAYANAN on Nov 14, 2009 11:49 AM
good joke .deposit your money for 8 % return and insure it at 10 % premium.Good economist...another P>Chidambaram in the making.much like a man insured for 2 crore walking in to a hungry lions den based on the assurance of his insurance policy.
How does a man on sreet know which bank is safe for keeping his hard earned money? How does one survive with only saved money, which he uses for monthly expenses is locked in failed bank? What is the interim relief available to account holder immediately? Consumer forum, Court, or our Parliament should ponder over this issue and widely well known process should be in place in case of such eventuality. All the banks should have credit rating for safety of customer deposit and its operation by some governing authority based on their past performance.
Re: Money in bank
by Raina on Nov 12, 2009 05:03 PM
all Public sector banks are backed by govt..so safe...other banks you get covered for 1 lakh per acount.
Don't assume that not only co-operative banks can go bankrupt, think about other banks too, the govt. has lot of fisical deficit and if tomorrow there is a recession then govt. can declare financial emergency and seize accounts. So best way to safeguard money is to keep withdraw money and distribute in small forms in home, small banks.
