Indian banks start to fail

[Longhorn]

Just look at faces, i feel really sorry for them, this is the real india, the real indians, far from the fantasies of bollywood and media.......

However, this is just the start........

Feel really sorry for these ordinary people.

 

[Shahzaz ud din]

 

[Longhorn]

Alright, a little of review reveals the reality.

From the first video :

View attachment 581844


It seems these Banks are having restrictions put on them by India's federal bank to limit withdrawals by customer for a certain period of time. Pretty bad for anyone having money there! The silver lining is that the money is not lost though..

A bit of search reveals even more details..

https://www.indiatoday.in/business/...o-rs-10-000-for-six-months-1603506-2019-09-26

It seems that this restriction was placed to prevent loss of deposited money due to irregularities in the bank operation.

Few more interesting facts. This restriction was applied to something called as "Co-operative bank". A bit more of search reveals that these are India's equivalent of Credit Unions.

Now I know credit unions and have financed money from them for a number of my real estate investments. These are usually less regulated and have a separate mechanism for protection of accounts there than high-street banks. It seems in India, they are also regulated by their Federal Bank.

In all, this thread and title is gross mis-representation of facts. No wonder the original poster was so reluctant to link to the real source of the story.
@Nilgiri, any comments?

So yes, this is Misrepresented if not fake news.

35A again.

35A again.

Is this India's version of the 2008 financial crisis?

 

[xyxmt]

Weird title. Banks do not exactly become defaulters. Banks can have liquidity crisis or loss. This is because default means not paying a loan. Banks don’t exactly take loans.

Source of this news?

@Nilgiri do banks in India take loans to operate?

may be can't pay the depositors?

 

[Nilgiri]

So yes, this is Misrepresented if not fake news.

Well, the forum has policy of strictly using the article title (for thread header) for a reason.

When there is no article at hand, I suppose just whatever suits the OP fancy will do.

Ah! So it is similar to the credit union exposure to bad credit in real estate as it happens here?
I remember, reading sometimes back that Toronto and Vancouver have a number of credit union who issued loans to less than prime customers for investing in real estate.

Yours truely also flipped condos in '16 with a bad credit score and credit unions All hail the church of Vancity!

There are some broad similarities, but also differences (like stuff that prompted this stuff to go sour earlier up the economic chain etc)....to be frank, Indian economy is gonna go through lot of churn for a while because it is still quite disorganised and not well prioritised compared to global average...but there is lot of good positive success to also learn from and keep expanding.

 

[truthseeker2010]

Weird title. Banks do not exactly become defaulters. Banks can have liquidity crisis or loss. This is because default means not paying a loan. Banks don’t exactly take loans.

Source of this news?

@Nilgiri do banks in India take loans to operate?

Shortage of liquidity is the death of bank.

 

[BringHarmony]

may be can't pay the depositors?

Rather they want to ensure that fraudsters don't take away the money while they do the audits. Seen happening few times. Almost all the credit unions are insured in Canada. For India, someone must be insuring the deposits.

Shortage of liquidity is the death of bank.

Not necessarily. Many times they may be holding assets which can be liquidated. Example, they provided loan for buying condos but one fine day there is a run to the banks. It does not mean the bank has gone belly-up, it simply means that the bank does not have enough cash to fulfill demands. They can restrict the cash withdrawal and later liquidate their positions to bring cash in the system.

 

[xyxmt]

Rather they want to ensure that fraudsters don't take away the money while they do the audits. Seen happening few times. Almost all the credit unions are insured in Canada. For India, someone must be insuring the deposits.

there is a limit on insured amount and when banks go belly up people do loose money and lot of people loose money in 3rd world countries where law only protects powerful.

 

[BringHarmony]

there is a limit on insured amount and when banks go belly up people do loose money and lot of people loose money in 3rd world countries where law only protects powerful.

Yes! it is. But its usually very generous. Here in canada its 100K per financial institution. @Nilgiri Whats the limit of liability in India?

In poor countries there are often many accounts with very small amounts. Likely they will be safe.

I have not seen deposits going sour in checking or saving or CDs in almost all the major economies. Usually the money goes sour in more unregulated funds.

 

[truthseeker2010]

Rather they want to ensure that fraudsters don't take away the money while they do the audits. Seen happening few times. Almost all the credit unions are insured in Canada. For India, someone must be insuring the deposits.


Not necessarily. Many times they may be holding assets which can be liquidated. Example, they provided loan for buying condos but one fine day there is a run to the banks. It does not mean the bank has gone belly-up, it simply means that the bank does not have enough cash to fulfill demands. They can restrict the cash withdrawal and later liquidate their positions to bring cash in the system.

There are restrictions placed by CB that is to make sure that bank is able to cover its day to day obligation. Failure to do so means that either you have eaten up your cash reserve or your assets are not generating cash.

 

[koolio]

Cost of maintaining 1 million army in Kashmiri taking tool
The end could be near

Before than happens Pakistan needs to be vigilant, as the Indian army will do something crazy.

 

[AZADPAKISTAN2009]

Difficult to maintain a Million man soldier force to forcefully occupy Pakistan's region , Indian debt will grow exponentially

 

[HRK]

Wonderful sugar coating by a folk who claim to have a better understanding of a so called $2 trillion economy and taunting about IMF, first he need to explain how bad this situation would effect the TRUST of:

- Business community and common depositors on banking system and

- How bad it appears at international level when a common Joe note that "$2 trillion economy" is facing such level of liquidity crunch that banks are restricting the fund withdrawal for their depositors

- How bad it will appear to someone who have rudimentary level of understanding of economy and banking system, would he not check the non-performing advances of Indian Banking sector ?

- Would he not question the overall monitoring policy of Reserve Bank of India over the banking sector ?

- What would be the effect of this on the deposit of other banks ?

- What would be the effect of this on interest rate ?

- How would this effect on currency circulation ?

- How would it effect on Money Creation in Indian banking sector

- Would this not give raise to the trend of Holdings against Savings in general ?

- How the authorities would address this issue, specially when they have already given 6 month time which mean half of the financial year ?

- How soon the banking sector would recover from this Breach of Trust

Either they should answer these very basic questions first or should giveup the habbit of making comments in condescending tone

 

[Nilgiri]

Yes! it is. But its usually very generous. Here in canada its 100K per financial institution. @Nilgiri Whats the limit of liability in India?

In poor countries there are often many accounts with very small amounts. Likely they will be safe.

I have not seen deposits going sour in checking or saving or CDs in almost all the major economies. Usually the money goes sour in more unregulated funds.

It depends for India, its not very organised (though it should be, but India needs to become much further along middle tier development I feel for it to start achieve that robustness of scale in threshold value covered). I think the value of basic coverage is nominal, around a lakh.

It is estimated about 92% of accounts are insured in India...vast amount are small size day to day kind of things based...most likely under the 1 lakh amount (though this is increasingly not enough if you ask me and should be inflation indexed lot more regularly).

More info:

https://www.thehindubusinessline.co...mains-the-lowest-globally/article29189333.ece

As for larger amounts, basically ppl have to take other insurance programs.

 

[BringHarmony]

1 lakh

As in 1 million Indian currency?

How much money typically people in India have in their checking accounts or CDs?