The Government of India has recently released GDP figures. And the GDP figures are frightening. In such a situation, the question is now whether your money kept in banks is safe? Many people are anticipating that banks may sink in the coming time. But is it more likely that your money is no longer insecure even in banks!
Recently, Yes Bank had faced a major financial crisis. After that the Government of India took over this bank. At the same time, when talking about the cooperative bank of Maharashtra, the money of about 900,000 customers is still stuck there. And as of now, there is no information about how long they will be able to get their money back or not.
Is your money in banks safe?
Today’s biggest question is, should your bank secure my account? According to the recently released GDP figures, India’s GDP – 23.9% has shrunk. After this, this question has started to arise even more. Recently, it was seen that many bank scams were revealed. After which questions were raised on India’s banking system.
But recently, the money kept in your banks is safe, the government will not let the banks drown under any circumstances. Experts in the coming times are hoping that the government can privatize banks. And only 4 government banks can stay in India. In India, all private banks or public sector banks are safe. However, the government may have to infuse capital into these banks in the coming times. Because NPAs of banks have been increasing continuously since last 2 years. And the condition of banks is continuously deteriorating.
However, the questions on cooperative banks have definitely arisen. Talking about an operative bank in Maharashtra itself, the money of about 900,000 people is stuck there. In this case, how long will those people get their money? This is a great question. But if your money is in government or private banks. Which is the national bank. Then your money is 100% safe.
Will safe money work for you?
If you have deposited your money in banks, you will also want to get good returns on it. And at least equal to inflation, you get returns. Suppose if ₹ 2 inflation rises at ₹ 100, you would want at least you to get ₹ 5 return on ₹ 100.
With this, you will be able to neutralize inflation. On the other hand you will continue to get interest month after month to live your life. But what happens in such situations when the value of money kept in your banks decreases. Here we explain by giving examples. For example you used to get 1 kg of sugar at ₹ 100 1 month ago. But after a month you are seeing that for ₹ 100 you are getting half a kilo of sugar. In this case, the purchasing power of the rupee has reduced. And your ₹ 100 is reduced on its own. And now its purchasing power has become equal to ₹ 50.
In such a situation, you would not like that your money lying in the bank kept decreasing. In such a situation, what break can the government get in the coming times. It will be interesting to see.
Cheap loans from banks are hurting you
The Reserve Bank of India is continuously reducing debt rates to maintain demand in the economy. If we look at the recent figures, the cheapest loan in the last 20 years has been provided by the government. But if you have not taken a loan from the bank, and your money is deposited in the banks. So it’s hurting you.
Let us explain you by an example here. Suppose the bank gives you a loan at 6% interest rate. So believe me, only the bank will be able to give interest on your savings. If the banks reduce the lending rates, then your savings rate will also be reduced continuously. In such a situation, cheaper rates of debt are continuously hurting your savings. In such a situation, you will also face difficulties in controlling inflation. At the same time, the power of the rupee falls, your difficulties are also increasing continuously.
It is generally seen in India that people whose money is deposited in banks. They rarely take loans from banks. In such a situation, the bank’s cheap loan interest rates are hurting your savings.
Where is the problem in Indian banking system
At this time, if you look at the Indian banking system, the problem of NPA is continuously increasing. This is also affecting banks’ ability to lend. But where does this problem start?
This problem starts with banks lending. Banks give loans to large amounts of people. And later people do not return to him. So, if banks distribute the loans to the people. If they do not come back to the banks, it affects the banks’ ability to lend. And later the government has to put more money into it. This increases the pressure on the Indian banking system.
If at any time there is a downturn in the Indian economy, this problem of banks increases even more. Because banks that give loans to industries. They drown. And the problem of NPA increases even more. On the other hand, the government constantly wants that the interest rates be continuously low. More and more people take loans and start their own industries. This will accelerate the economy.
But the other side of it is that people who want to deposit money in banks with it. Those people will not deposit money in banks. Because if they will get a lower interest rate. So why would they deposit money in banks? According to recently released data, the rate of money deposited in banks in India has reached a minimum level of 10 years. In such a situation, you can understand the crisis of the Indian banking system.
Public breathtaking schemes are under pressure on banking system
It is not that only those who are unable to repay the loan. At the same time, the Indian banking system is under pressure. Rather, political populist schemes have also kept constant pressure on the Indian banking system.
Let us explain to you here through the Mudra scheme. Prime Minister Narendra Modi launched the Mudra Yojana. And it said that loan of 40000 to ₹ 50000 will be given to the people from banks without any guarantee. Later, when the figures for the scheme came out, he was intimidating. Most of the debts of the Mudra Loan Scheme have sunk And this put pressure on the Indian banking system. The government gave this information in the Lok Sabha in response to a question.
There are a lot of schemes of this way which keep the pressure on the Indian banking system continuously. And the banks’ debt remains submerged. This also increases the NPAs of banks continuously. The Mudra scheme is a very small scheme of the Indian banking system. But even then it has affected the Indian banking system.
The second one which affects the Indian banking system more. It is generally seen that loans are given to Indian banks on loan despite default. This puts pressure on banks. The companies later go bankrupt. And a large part banks have to forgive. This keeps increasing pressure on the Indian banking system. This not only affects us and your savings. It also has a negative impact on GDP.
We can take the example of Yes Bank here. If you go to the main reasons for the sinking of Yes Bank, then you will find that the loan was given to the corporates on loan despite defaulting by the bank. This affected Yes Bank’s system. And in the end the result was that this government had to take over in very bad financial condition. Yes bank is just an example. It is happening in large quantities in the Indian banking system that, despite defaulting loans to corporates, loans are being given on loan.
Corona virus will tell pressure on Indian banking system
Due to Corona virus, the government extended the time to repay their loans, giving big relief to the borrowers. Or gave them the facility that they can repay their debt in later months. But now the borrowers will start depositing the loan back from the banks. In such a situation, it will be interesting to see how much of this debt is drowned by banks.
If more money sinks the banks, the NPA will increase in the coming time. Experts are hoping that in the coming years NPA can reach its highest level in the Indian banking system. In such a situation, a large number of banks have faced an existential crisis. In recent times, it has been seen that the government is constantly insisting on privateizing banks. But which industrialist will buy these banks in times of recession? It will also be interesting to see.