Just consider it as business bankruptcy which inflicts a financial loss to many people.
This news is exaggerating what happened in India as it just one bank not all of them, and 80% of the losses have been covered by the bank assets. That is the role of the government to make sure everyone gets what they are entitled to. This is an example of why we shouldn't saving too much money in a bank, just put enough to meet your daily needs and pay your bills, the rest of your funds invest in some assets like bitcoin.
Topic: Bank Crisis Hits India, Many Accounts Wiped Out, People Left With Nothing - page 3. (Read 456 times)
October 09, 2019, 10:46:13 AM
October 09, 2019, 10:04:35 AM
Is there no bank insurance on account holders? In India banks are allowed with no deposit insurance to its customers? I don't think people should be left with nothing completely.
Happenings like this are becoming common especially on corrupt countries where people in power and the rich collaborate each other for their own benefits. They can easily attain loans without proper procedures. Armed with the right connections and everything is possible for them.
Happenings like this are becoming common especially on corrupt countries where people in power and the rich collaborate each other for their own benefits. They can easily attain loans without proper procedures. Armed with the right connections and everything is possible for them.
Most probably they have bank insurance but only offers minimal insurance with estimated amount of $1,508 which is way too low if compared to what other banking institutions offers around the world! that is why India's deposit insurance industry is ranked among the lowest in the world! Certainly that bank will surely collapse and will go bankrupt amidst a possible bank run which would most certainly occur not to mention its tainted credibility among the banking industry.
I think this is where the benefits of transparency,immutability, etc., from blockchain technology comes into play! and in reality,this scenario is a regular occurrence among the banking industry all over the world and we were only left asking this questions: what happened to Government imposed regulations in the banking sector? I guess soon they will recognize the benefits of using blockchain technology in which that crisis could have been avoided if only they've adopted it.
Source: https://timesofindia.indiatimes.com/business/india-business/at-rs-1-lakh-indias-bank-deposit-insurance-lowest-in-world/articleshow/71485135.cms
October 09, 2019, 09:13:51 AM
Is there no bank insurance on account holders? In India banks are allowed with no deposit insurance to its customers? I don't think people should be left with nothing completely.
Happenings like this are becoming common especially on corrupt countries where people in power and the rich collaborate each other for their own benefits. They can easily attain loans without proper procedures. Armed with the right connections and everything is possible for them.
Happenings like this are becoming common especially on corrupt countries where people in power and the rich collaborate each other for their own benefits. They can easily attain loans without proper procedures. Armed with the right connections and everything is possible for them.
October 09, 2019, 09:04:41 AM
Is this even a surprise anymore, I already saw an article where banks ripped off their customers a week ago, it's almost like your money will never be your money...
Keeping your money in a bank was seen as safe and reliable previously, but the more I read and research it's feels like it's the complete opposite and having your money in a bank just leads to issues.
How are these people going to get their money back? It looks like PMC is a dead company now and things look dire.
Keeping your money in a bank was seen as safe and reliable previously, but the more I read and research it's feels like it's the complete opposite and having your money in a bank just leads to issues.
How are these people going to get their money back? It looks like PMC is a dead company now and things look dire.
October 09, 2019, 09:03:53 AM
When asked why people still keep money in banks, most say that it is still the safest way (for them).
It is not the safest way for them, the thing is, it is the only thing they know how to store their money, in a "Safer" way. They are afraid of trying out new things like bitcoin as a way of storing their money as an investment, which is why they have no choice but to put their fiat in the bank even they know to themselves that it is risky, they are trusting the bank too much because they think that the bank will do something whenever there is going to be a problem inside the bank.
I dislike the banks because we trust them but they don't trust us, how ironic is that. They are like a selfish person who always want to take the benefits for himself.
October 09, 2019, 09:01:11 AM
I wouldn't call this as a major crisis. India is a country of 1.35 billion people and the number of users who got affected was a few thousands, as per the latest media reports. And most probably, the government is going to reimburse them most of the money that they have lost. I checked the major newspapers here in India and none of them even have this news in the front page.
And it looks like the government authorities have already moved in to limit the losses. Most of the accused are in police custody (Joy Thomas, Waryam Singh, Rakesh Wadhawan and Sarang Wadhawan). The authorities have also frozen assets worth ₹35 billion, which covers almost 80% of the losses made by the PMC Bank (₹43.55 billion).
And it looks like the government authorities have already moved in to limit the losses. Most of the accused are in police custody (Joy Thomas, Waryam Singh, Rakesh Wadhawan and Sarang Wadhawan). The authorities have also frozen assets worth ₹35 billion, which covers almost 80% of the losses made by the PMC Bank (₹43.55 billion).
October 09, 2019, 08:31:40 AM
What happened to the Punjab Maharashtra Co-operative Bank (PMC) in India can also be happening elsewhere. This can be so unfortunate as the banking sector forms one of the many critical pillars of any country's economy. Destroy the banking system and we all effectively put the whole economy on chaos and turmoil which can all lead to recession of the economy and the shrinking of the GDP. People manning the banks are not holy angels so they are under the pull of human nature and that is greed. There should have been strictly implementation of regulatory laws covering all the banks and red flags should have been reported earlier so as to avoid the things that pushed PMC to bankruptcy. The problem comes in when the government has no strong political will to mend the broken ways a bank can get into. Now, those in the government and regulatory bodies should not be wondering why some people are really clamoring for innovations and changes that they are finding in cryptocurrency.
October 09, 2019, 08:27:01 AM
We can all silently pray for the people whom got scammed by PMC. This goes to show what are the risks that are employed when giving your money to banks. Even though this kind of situations happens, people still accept banks and they feel much safer using them. Why? It's becayse it is the most acknowledged form of cash storage(something like that, my grammer is limited sorry). This makes them turn away from the reality of improvement in which scams and lies can be avoided and the future of which is blockchain technology.
October 09, 2019, 08:16:50 AM
being poor is bad but having a lot of money also causes sorrows.
best is still being master of a manual work trade and thus being able to get along at all times.
best is still being master of a manual work trade and thus being able to get along at all times.
October 09, 2019, 08:10:40 AM
It may be rather ungrateful to evaluate the state of the Indian banking system on just one case, but it is strange that this bank managed to do things like this and was able to create 21 000 fictitious accounts to hide bad business. This shows us that actually control of the central bank failed in his work, or at least it was late to prevent financial malversations.
When asked why people still keep money in banks, most say that it is still the safest way (for them). And given the attitude of the Indian government towards cryptocurrency, I think it's hard to expect people to change their minds and turn to something else, especially towards Bitcoin, which is still too complicated for most.
In my opinion, any investment is a risk, but I think that keeping money in banks at times like this is an even bigger risk. In some countries (EU) state guarantees for the funds up to a certain amount, so even if banks fail the client is insured against loss.
When asked why people still keep money in banks, most say that it is still the safest way (for them). And given the attitude of the Indian government towards cryptocurrency, I think it's hard to expect people to change their minds and turn to something else, especially towards Bitcoin, which is still too complicated for most.
In my opinion, any investment is a risk, but I think that keeping money in banks at times like this is an even bigger risk. In some countries (EU) state guarantees for the funds up to a certain amount, so even if banks fail the client is insured against loss.
October 09, 2019, 06:51:43 AM
Quote
The Punjab Maharashtra Co-operative Bank (PMC), in India, has been caught cooking the books and misreporting non-preforming loans (NPL) of Mumbai-based real estate developer Housing Development and Infrastructure Ltd (HDIL). As Reuters reports, PMC hid the bad loans with 21,000 fictitious accounts, which has spooked depositors, investors and government officials.
Reuters learned about the massive fraud through a complaint filed with the Economic Offences Wing (EOW) of Mumbai Police earlier this week, alleges that PMC concealed $616 million in NPLs.
BloombergQuint said PMC's loan book had a 73% exposure to HDIL's failed real estate dealings.
The complaint says PMC's Chairman Waryam Singh and its Managing Director Joy Thomas were at the center point of the fraud. It also names HDIL's former senior executives Sarang Wadhwan and Rakesh Wadhwa, who were the recipients of the real estate loans.
As recession fears intensify in India, the PMC banking crisis has ignited the debate among government officials that the banking sector could be headed for turmoil.
The Reserve Bank of India (RBI) took over PMC last week and has prevented the bank from new loan creation, while nearly 900,000 depositors have been informed that capital controls are being placed on their accounts for six months.
Dozens of videos have been uploaded to social media this week, detailing how depositors are being locked out of their accounts, some fear the worst, as the bank has likely failed.
One depositor said he lost all of his money in the PMC banking crisis.
Thousands of people have marched in the streets this week, demanding PMC return their savings.
Another heartbreaking moment when a woman discovers her family's savings were completely wiped out in the banking crisis.
Hundreds crowd inside one PMC bank branch, attempting to withdraw their savings, as they learn the bank failed.
CNBC TV18 reported depositors are feeling "anger and pain" as they learn capital controls have limited them to only withdrawing $100.
With a financial crisis developing, the Reserve Bank of India is scrambling to reassure the public that the banking sector isn't imploding.
https://www.zerohedge.com/markets/bank-crisis-hits-india-bank-stops-functioning-people-crying-outside-bank-branches
Reuters learned about the massive fraud through a complaint filed with the Economic Offences Wing (EOW) of Mumbai Police earlier this week, alleges that PMC concealed $616 million in NPLs.
BloombergQuint said PMC's loan book had a 73% exposure to HDIL's failed real estate dealings.
Quote
"The actual financial position of the bank was camouflaged, & the bank deceptively reflected a rosy picture of its financial parameters," said the complaint, noting that the fictitious loan accounts were not entered into the bank's core banking system - a factor key in the perpetration of a $2 billion fraud at Punjab National Bank that was uncovered in 2018, said Reuters.
The complaint says PMC's Chairman Waryam Singh and its Managing Director Joy Thomas were at the center point of the fraud. It also names HDIL's former senior executives Sarang Wadhwan and Rakesh Wadhwa, who were the recipients of the real estate loans.
As recession fears intensify in India, the PMC banking crisis has ignited the debate among government officials that the banking sector could be headed for turmoil.
The Reserve Bank of India (RBI) took over PMC last week and has prevented the bank from new loan creation, while nearly 900,000 depositors have been informed that capital controls are being placed on their accounts for six months.
Dozens of videos have been uploaded to social media this week, detailing how depositors are being locked out of their accounts, some fear the worst, as the bank has likely failed.
One depositor said he lost all of his money in the PMC banking crisis.
Thousands of people have marched in the streets this week, demanding PMC return their savings.
Another heartbreaking moment when a woman discovers her family's savings were completely wiped out in the banking crisis.
Hundreds crowd inside one PMC bank branch, attempting to withdraw their savings, as they learn the bank failed.
CNBC TV18 reported depositors are feeling "anger and pain" as they learn capital controls have limited them to only withdrawing $100.
With a financial crisis developing, the Reserve Bank of India is scrambling to reassure the public that the banking sector isn't imploding.
https://www.zerohedge.com/markets/bank-crisis-hits-india-bank-stops-functioning-people-crying-outside-bank-branches
....
Whether people realize it, similar scenarios are playing out across the world. Banks are becoming insolvent and adopting questionable unethical policies on their depositors in an effort to cover costs. This has been an ongoing theme for a long time. Something that has not necessarily been fully addressed even after the 2008 economic crisis. Like Paul Krugman said: "kick the can down the road" (leave the real problems for someone imaginary person in the future to fix).
Unfortunate for us, while mainstream media spams us with stories about bitcoin being a bubble. There is very little coverage on banks all over the world imploding and needing to be bailed out and saved from their own mismanagement and poor decisions. This has a tendency to give people flawed opinions on the effectiveness of state imposed regulation as well as the claimed stability and reliability of traditional financial institutions like banks.
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