Topic: Bank Crisis Hits India, Many Accounts Wiped Out, People Left With Nothing (Read 456 times)

Also, maybe you could provide us links to the latest updates for reference.

The Enforcement Directorate (ED) today provisionally attached properties worth Rs 3,000 crore belonging to Rakesh and Sarang Wadhavan, promoters of bankrupt real estate firm HDIL.

The ED's action, which is based on the investigation of the Mumbai Police's Economic Offences Wing (EoW), comes soon after it also initiated provisional attachment of the Wadhawans’ 22-room beachside Alibaug bungalow that stands on a 2.5-acre property, two private jets -- a Falcon 200 and a Bombardier Challenger -- and jewellery worth Rs 60 crore.

The agency had also frozen five bank accounts of Waryam Singh, the former chairperson of the PMC Bank, who was named in the first information reports (FIRs) of the ED and EoW. So far, the value of the assets attached total up to Rs 3,500 crore, or more than 80 percent of the money it owes PMC Bank, even as, a source said, the ED is confident of exceeding the total amount owed.

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.

So from this we can conculde that nowadays banks are aslo not safe to keep your money as scams are happening in every feild of work.So who are to we blame in this?Rich took loans from banks and misrepresent their financial statememts to fool banks and then this whole thing turns out te be scam.And poor people fails to improve their financial conditions under these cases.So that is why btc and blockchain technology needs to be adopted to create a safe and secure environmemt to transact online transactions with transparency.

Despite how little trust there is left in the banking system, banks remain the best option to store your fiat wealth.

I personally haven't ever had a problem with my bank account, neither did I ever fear that anything would happen to my money. In most western countries the oversight on banks (especially publicly traded banks) is so tight that on a retail client level there isn't much to fear about. It gives people the peace of mind they're looking for.

I feel so sad about what happen to them the reason why I really don't trust bank because of that. We thought that our money is safe but look at what happens? All their money is gone so I would prefer to just invest in bitcoin rather than saving money on the bank that you are not sure if it's really secure.

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.

But why should the media be exposing how the banks are incompetent? The banks are the most powerful entity in this world. They control governments, they can also control the media more easily. News will come out of banks' shady transactions and extreme failures when they are about to explode already and they cannot contain it anymore because sooner or later the public will still know.

To be blamed most is the India's central banks failure to put monitoring mechanisms in place. learning from this incident they ought to tighten their rules.  This is a lesson that no investment is 100% safe be it crypto or not.

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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.

This stuff is not unique - Wells Fargo of the United States also got caught making ficticious accounts and they got fined $100 million and had to pay back $2.5 million to account holders who were defrauded.

The only difference between the US and India is that the American authorities crack down heavily when they can (American prosecutors can make their name and then go on to run for state Governor if they can take down a big name, so they have a big incentive to make sure these types of frauds get prosecuted).

I don't know how you can blame the government when this scam was perpetrated by a few high ranking bank official with no links to any of the political parties. I would rather congratulate the government for acting quickly and arresting the accused before they were able to flee to safe heavens (as many of the criminals have done in the past). The government also froze the stolen assets, so that the account holders could be reimbursed for their losses.

As per the latest updates, the government has recovered around 80% of the stolen amount and this will be reimbursed to the users sometime soon. And many of the scammers are likely to forfeit their own fortunes, in return for a milder punishment. Therefore I expect the victims to be compensated in the range of 90% to 100%, and here I would be rather praising the government rather than complaining about it.

Absolutely! Not only the Central Bank of India is to be blamed but I guess the Government of India and all its regulating bodies that have failed to do their part should be blamed as well!

But on the brighter side, I assume the Indian Government will further strengthen and improve their regulations and learn lessons from this incident to prevent it from ever happening again in the future or at the very least minimize the possibility of its occurrence - thus making their banking system more robust to retain the confidence of its stakeholders.

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.

To be blamed most is the India's central banks failure to put monitoring mechanisms in place. learning from this incident they ought to tighten their rules.  This is a lesson that no investment is 100% safe be it crypto or not.

This is really a sad and uncalled miss happening in India where the banking sector has been witnessing worse things by the day over the last couple of years. The Reserve Bank of India kind of needs to be held accountable here too as they could've prevented this if they took the right actions when signs of a scandal like this seemed likely.

Then again, giving ₹25,000 as compensation is like throwing a nickel into a beggar's bowl which already had $5000+ stolen off of. I really hope these woes end with the accused on the run being put behind bars and the rightful people getting their monies back.

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.

This is really a sad and uncalled miss happening in India where the banking sector has been witnessing worse things by the day over the last couple of years. The Reserve Bank of India kind of needs to be held accountable here too as they could've prevented this if they took the right actions when signs of a scandal like this seemed likely.

Then again, giving ₹25,000 as compensation is like throwing a nickel into a beggar's bowl which already had $5000+ stolen off of. I really hope these woes end with the accused on the run being put behind bars and the rightful people getting their monies back.

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).

Two Rolls Royce cars worth nearly Rs 6 crore each and a Bentley Continental GT worth approximately Rs 2 crore were among a dozen cars seized. On Saturday the agency said it had also attached a private jet and jewelry worth Rs 60 crore.

I wouldn't either, but tell that to the customers involved.  They're the ones feeling the pain.

Unfortunate for us, while mainstream media spams us with stories about bitcoin being a bubble.

I wouldn't call this as a major crisis.

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.

When asked why people still keep money in banks, most say that it is still the safest way (for them).

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