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he Central Board of Reserve frauds of fraudulent transfer of funds. You must know how big is the NPA
Bank of India’s (RBI) will be Let us understand the basic safety nets of your bank both gross and net. Non
meeting on December 13 in in place that can save you from total Performing Assets are a good indicator
Odisha’s capital Bhubane- loss in case your bank goes bust. The to know about the future of your bank.
T swar. The agenda is to ask Deposit Insurance And Credit Guar- You may not know quarterly results
the Deposit Insurance and Credit Guar- antee Corporation (DICGC) insures all of your bank but keep at tab on the year
antee Corporation (DICGC), the wholly bank deposits up to 1 lakh. Means even on year performance of your bank. You
owned subsidiary of the RBI to estab- if you have 1 crore lying in your bank should also keep an eye if there have
lish a separate reserve to safeguard the or more, the Deposit Insurance and been big corporate frauds concerning
interests of depositors of banks. Cred Guarantee Corporation insure just or related to your bank. In the mean-
The move comes on the heels of the 1 lakh. God save the rest. while, in a relief for crores of depositors,
Finance Ministry move to increase the And mind it, all your savings, fixed Finance Minister Nirmala Sitharaman
deposit insurance limit to 5 lakh from deposits and recurring deposits, at has confirmed that the government
the current 1 lakh. If this hike comes the same bank across any number of would bring legislations on raising in-
into effect, it will be the first upward branches are insured up to 1 lakh. surance cover on bank deposits from
revision in deposit insurance. The last God forbid if there is a problem with the current 1 lakh in the wake of fraud
revision in the current limit of deposit your bank and it goes bust, the DICGC in PMC Bank. The bank has over 11,000
insurance was effected on May 1, 1993, will compensate you to this limit of just crore in deposits from its customers
after the Bank of Karad collapsed in the 1 lakh. You may not be able to get back across 137 branches.

Understanding risks

linked with banking

Risk is absolutely fundamental to investing but an investor needs to figure out where risk
really lies and what is the difference between low risk and high risk, reports tehelka bureau

securities scam of 1992. The move is rest of your money deposited with the The government would also intro-
coming in the aftermath of scams just banks beyond 1 lakh. All high-value duce legislation to regulate multi-state
as in the case of the Punjab & Maha- depositors, salaried persons and pen- cooperative banks during the Winter
rashtra Co-operative Bank (PMC Bank) sioners who survive on monthly inter- Session of Parliament that is on now,
and the Pen Co-operative Urban Bank. est income have nothing to rely upon. the finance minister said. “Work is on
You will be left with just 1 lakh of all and we shall go to the Cabinet for ap-
No risk free banking your hard earned money lying in your proval to introduce a legislation in win-
The developments lay focus on the account with any bank if bank goes ter session. The legislation will amend
fact that there is no such thing as risk- bankrupt or insolvent. the necessary Acts and the laws to
free banking. At times you avoid non- make sure that banking functions un-
banking finance companies thinking Observe caution dertaken by cooperatives sector will
that deposits in the NBFCs are not safe. Well if you are a high value customer be brought under the Banking Regula-
Is your money safe with banks? Think of the bank, it is imperative for you to tion Act for complying with prudential
again. The money you consider safely remain alert all the time. As banks say norms,” she said. Unless the prudential
deposited in your banks, whether pub- know your customer, you too should norms are applied, many of the things
lic sector or new generation banks too know your bank well. You must always that are emerging in the light of the
is subject to various risks and not hun- be aware as to how your bank is per- Punjab and Maharashtra Cooperative
dred per cent safe. forming. Stability and financial health Bank crisis will never be addressed and
There is nothing called as risk-free of your bank is very important to you this legislation will ensure that no PMC
banking. I am not talking about online if you want to safeguard your interests. like case happens in the future, she said.

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