After PMC, yet another bank - Yes Bank has crashed down. This was India’s fourth largest private bank and thus raising questions on the whole banking system which is currently going through a crisis. Yes Bank crisis took place because of their NPA(Non Performing Assets).
Why do Depositors always have to suffer?
As an emergency measure, RBI has put Yes Bank under moratorium and imposed a withdrawal limit of Rs 50,000 per month. RBI said this was necessary because of a serious deterioration in Yes Bank's financial position. The question still lies that how many more banks will collapse in the future and is your money safer with the banks?
Yes Bank - From past 2 months it was also clear that yes bank would need a takeover. But, despite all the warnings by the Government of India and Yes Bank Management did a little to it on a note. Finally when the RBI cracked down - it left scores of customers running to the bank with Rs. 50,000 as the withdrawal limit.
What is you should do to keep you money safe? What is the good option for you? What should you do in this moment of crisis? Investors and shareholders get away with the mess, it's us who are left to bear the crisis, suffer in long lines and find out funds stuck in the banks. When PMC Bank (which was smaller than Yes Bank) collapsed some deaths too were reported.
It's time to wake-up and accept that Indian economy is in bad shape. Understand what does GDP growth really mean to India and crisis behind lowest GDP growth in quarters. You can also keep a close track on your banks. Keep checking if your banks have stressed assets? What the press is saying about your bank? It's records, etc.Those who realised that yes bank was in bad condition, withdrew their money already. It wasn't as absurd as it was in case of PMC Bank. So those who have been tracking the status were safe. If you have all your money deposited in one bank then do spread it out to at-least into 2 or 3 or 4 banks or better option is to go for long term investments.
If you don’t need the money now, don’t deposit it only in banks but also in mutual funds, you can invest in mutual funds as stock market is anyway down these days, You can also opt to buy digital gold.
We are usually very lazy in this aspect. We avoid investment in mutual funds and keep our money in banks thinking that 3 to 4 % interest would be added as a profit in our banks, which is not enough since inflation keeps on rising. So at-least keep tracking your money in banks through Banks Annual Reports and go for long-term investment such as gold and mutual funds.
I hope that, the article was informative and might have helped you to start thinking for better investments. Kindly share this post if you liked it and click here to subscribe.
Opinions are of the guest writer and not of StackMantle.