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Bank on India and make your money safe
Published on Sat, Oct 11, 2008 at 07:42, Updated on Sat, Oct 11, 2008 at 17:30 in Business section
Tags: Financial Crisis, Bailout Package
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The global economic crisis has come to India. Share markets are down; industrial production is down and the mood among businesses and investors is down.
Share markets have lost over Rs 600 crore in a week, with interventions by the government, the RBI and market watchdog SEBI doing little to boost investor sentiment.
The shares of many of India’s biggest and best companies have plunged in the markets and investors big and small are pulling out their money. If the share market was not bad enough data released on Friday showed industrial growth for August has dropped to 1 per cent from 11 per cent and the Rupee is trading to a six-year low.
The Prime Minister, Finance Minister and the RBI Governor have repeated said India’s economy strong enough to weather the storm in the world financial market and it’s banks have enough money.
“The fundamentals of the Indian economy have been strong and continue to be strong. The Indian banking system is sound, well capitalised and well regulated,” said RBI Governor D Subbarao yet again on Friday night.
Is India’s strong enough to weather the storm in the world financial market? Is your money safe? A CNN-IBN show hosted by Karma Paljor discussed this on Friday with CNBC-TV18’s Banking Editor Latha Venkatesh, leading market expert S P Tulsian, who is the CEO of www.sptulsian.com, and Rajiv Bajaj, MD of Bajaj Capital.
If a bank goes bust
Delhi resident Deven Mehta wanted to know what would happen to his money in savings account if his bank were declared bankrupt? “Is it true that the amount of Rs 1,00,000 is insured in the savings account of any bank?” he asked.
“Yes, an amount of Rs 1,00,000 is insured for every depositor. The rules of Indian commercial banks are such that they render depositors safe,” said Venkatesh.
“For every Rs 100 a bank collects as deposit, Rs 25 will have to be kept with the government as bonds. Governments cannot default, so Rs 25 is anyway safe. Another 8.5 per cent cash should be kept with the RBI, so that is safe again. Besides these there are other safeguards in the banking system.”
“Lehman Brothers lent 40 times its capital as loans and Goldman Sachs lent 27 times it capital but India is nowhere near that kind of cowboy lending,” said Venkatesh.
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This message is to our Dear FM.
Respected Sir,
India may be able to
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In times of such uncertinities goverment securities are the best option as securing wealth has become much more important than
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We must thank the left parties if at all we come out of this without much pain, which seems to
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