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How safe is your bank? Remember, mental peace is important

Although considered to be generally safe, many banks have frozen depositors’ money because of weak financials. Private sector and cooperative banks are considered more vulnerable, but even IDBI was headed for trouble before LIC was made to buy it out. Clearly, interest rates on your bank fixed deposits are not the only criteria for an investment.

January 04, 2023 / 06:12 AM IST

Every once in a while, we hear about bank depositors’ money being at peril because something went wrong. Inevitably, the accusatory finger points towards the regulator and the government.

To be sure, the “system” has a responsibility, but every stakeholder has one too, and that includes the depositor as well.

In this case, ‘responsibility” of the depositor means understanding what s/he is getting into, what is the risk, and if something goes wrong, who is supposed to carry the loss.

This is important, because we tend to get swayed when we see the board of a “Bank” written in big fonts hanging outside a branch office.