- Deposits in Banks are relatively safe in
Banks. However, large deposits in small banks or
cooperative banks or weak banks are not totally risk free and in case
of failure of these banks, you may loose a part of your hard earned
money.
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- At present Banks are compulsorily required
to get their deposits insured from Deposit Insurance and Credit
Guarantee Corporation (DICGC). However, DICGC at present
insures deposits only upto Rs.1 lakh. Thus, deposits in
banks upto Rs.1 lakhs are safe and secure from the default by the
bank.
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- At present uniform premium is paid by all
banks to DICGC. (Banks are required to pay premium to
DICGC for this insurance of the deposits @ 10 paise / Rs.100/- p.a. on
all deposits). However, RBI is thinking of levying risk-based
premiums on banks. If it is done so, the banks paying higher
premium will be treated as more risky then the banks paying lower
premium.
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- In case of weak banks, RBI sometimes
imposes number of restrictions on the operation of the accounts for a
limited period, e.g. before merger of the bank with other bank
etc. Although, you may not face default by the bank, yet you can
be put to lot of inconvenience and your business may suffer on that
count.
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