After PMC Bank, now New India Co-operative Bank goes bust | Why do customers trust such banks?

Join Date: Aug 2021

Location: Bangalore

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Here?s a nexus to the treatment connected the PMC?s bank?s illness ? (Disscussion Link).

Will you proceed to spot specified Non-Scheduled Banks? Where volition you parkland your wealth for semipermanent investment?

Source

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Join Date: Aug 2014

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Glad to spot immoderate absorbing and antithetic caller threads by you successful caller 2 months from the DC mid-air level collision to Railway privatization to golden to this. Great work.

With respect to your pertinent question connected wherefore customers and depositors patronize specified banks. Small businesses patronize them owed to simpler oregon much lax compliance. There is simply a "convenience" origin they value. Then determination are the members of immoderate assemblage - professional, religious, geographical, occupational who acceptable up the co-operative slope to supply tiny fig debased fuss recognition that bigger scheduled banks don't. And yet determination are section tiny depositors of constricted means that are attracted by higher involvement rates which mean a batch to them with their constricted fiscal resources. These 3 categories, particularly the second 2 cannot recognize the complexities of the functioning of a slope and attendant risks and unluckily suffer.

Banks don't spell belly up implicit night. The fragility successful their equilibrium sheets is disposable a fewer to respective years successful advance. RBI has to besides reply arsenic to what steps did it arsenic the regulator instrumentality to support the tiny depositor.

Last edited by V.Narayan : 17th February 2025 astatine 08:19.

Join Date: Feb 2004

Location: Bombay

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Unlike the different scam banks (PMC & Yes), this was a antithetic benignant of theft. In fact, it was arsenic oldschool arsenic the benignant tin get. The managers & employees stole hard currency from the slope vault

My large wealth is lone parked with ample PSU banks (SBI and the like). No 1 ever mislaid wealth keeping it parked successful a BOI oregon SBI.

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From what I could gather, the trigger has been charges of embezzlement against an worker to the tune of 122 crores. It is unclear if the wide vulnerability of the slope is beyond this. The wide deposit mobilization of the cooperative slope is astir 2400 crores. That on with the deposit security strategy should hopefully support the bank's depositers. Of course, determination is nary compensation for the inconvenience and anxiousness of those with their savings stuck.

While specified cooperative banks are successful the quality for the incorrect reasons, they beryllium due to the fact that they service radical who the large PSU banks won't touch. Also, corruption is not constricted to these tiny institutions alone, bash retrieve that the main of 1 of India's largest backstage assemblage slope and among the excessively large to neglect was nether probe not excessively agelong back. She and her hubby were nether the scanner for however wealth was lent successful usurpation of norms. She had to yet exit successful disgrace.

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The fig of scams associated with co-operative banks successful Kerala is alarming. General statement is that funds successful specified banks are treated arsenic a no-questions-asked piggy slope by governmental members.

People person killed themselves due to the fact that they were incapable to retreat wealth successful their account!

Sad authorities of affairs.

Join Date: Feb 2004

Location: Bombay

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I judge the headdress for this is 5-lakhs?

I consciousness the PSU banks bash a large occupation of reaching acold & beyond areas (including agrarian areas which nary 1 other touches). And astatine slightest from what I saw successful Bombay, customers of this New India Co-Op slope could easy person been serviced by PSU banks oregon the large non-PSUs similar HDFC & ICICI.

Absolutely. But not erstwhile were determination immoderate restrictions connected withdrawals of the communal antheral for accounts held with ICICI Bank, owed to the Chanda Kochhar scam. Of course, it was a antithetic substance with Yes Bank.

Which is wherefore I personally spot lone the large PSU banks blindly, and HDFC / ICICI to a ample grade (but not arsenic overmuch arsenic an SBI oregon BOI). Of all, I emotion SBI. Even for car loans, determination are specified bully reviews from BHPians.

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During the truthful called demonetisation, co-operative banks were astatine the helm for exchanging notes and wealth laundering. People successful the cognize and links were capable to deposit currency limitlessly, dissimilar a mean feline who went to accidental SBI oregon ICICI. Who reads RBI circulars oregon knows wherever to work them? An mean joe conscionable spot the banks and the process.

A peculiar person and person was astatine the helm to usage his ain specified slope for his ain means, deploying adjacent subject aircrafts to transport currency trunks portion himself being the chanakya down it. Who knows precisely however overmuch achromatic was converted into white.

Why would 'customers' not usage specified banks. Only the naive and gullible suffer money. Banks are a privilege for the privileged.

Last edited by Fuldagap : 17th February 2025 astatine 12:58.

Join Date: Jun 2007

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Problem is that 'small' investors enactment their beingness savings into specified banks and galore are retirees. So invested magnitude volition beryllium important multiples of that Rs. 5 Lakhs limit.

Also, depositors security is not paid retired immediately. DICGC paid PMC Bank depositors 3 years aft the collapse.

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In this case, it was a Scheduled Bank. You tin zoom successful connected the sanction committee / banner successful the past photograph of your OP for confirmation.

As facts are dilatory being revealed successful the media, there's integrity issues of the unit (can't beryllium conscionable 1 oregon two) astatine the halfway of this downfall. Whether Scheduled Bank oregon not would not astatine each matter. The caller past person instances of large Private Banks too, wherever unit integrity issues caused problems.

What's alarming is that the substance was not detected by the Bank's ain interior Audit squad and corrective enactment taken, OR it was known and not tackled - which reflects the engagement of aggregate unit astatine precise elder levels.

Contrary to what astir radical think, a Co-operative Bank is taxable to outer audit by some - RBI and Registrar of Co-operative Societies. So, much scrutiny levels than conscionable commercialized banks.

The media reports that the substance seemingly was detected during a astonishment RBI audit simultaneously carried retired astatine the HO and a circumstantial subdivision of the Bank. So, the regulator astir apt got a tip-off of the ongoing and stepped successful to debar the rot getting retired of manus (if it hasn't already).

TAKEAWAY - Deposit little than the DICGC threshold successful a circumstantial Bank and support accounts crossed a fewer antithetic Banks, truthful arsenic to debar liquidity issues.

Last edited by Fx14 : 18th February 2025 astatine 00:12.