Vikas Gawri Explains How to Safeguard Your Bank Deposits

In a recent video, financial expert Vikas Gawri revealed that the Reserve Bank of India (RBI) has banned the New India Cooperative Bank due to fraud and unethical behavior. Hence, more than 1,30,000 depositors have not been able to withdraw their money, and most probably all of them are going to lose lakhs of rupees. It is a lesson for all depositors.

RBI's Deposit Insurance Rule

In order to safeguard the depositors, the RBI had brought a regulation in 2020 via the Deposit Insurance and Credit Guarantee Corporation (DICGC). The regulation states that if a bank fails, the depositors will be insured up to Rs 5 lakh. However, it doesn't imply that if you invest more, like Rs 25 lakh, you can take Rs 5 lakh from the RBI if the bank fails. The rest will be lost, and that can result in huge financial loss to many people.

Spread Your Deposits Over Different Financial Institutions

Vikas Gawri recommends that to avoid such threats, one should not invest all one's money in one banking company. Instead, one should diversify one's funds in a number of banks. For example, if one has Rs 25 lakh as the depositable sum, one should deposit Rs 5 lakh in five different banks. This way, if one bank falls into trouble, the person will still be covered up to Rs 5 lakh in all other banks.

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Choose Safe Banks with Good Reputation

Additionally, choosing reputable and secure businesses like HDFC or SBI is crucial. They have a solid reputation in the field and are least likely to experience issues that could result in the loss of your deposits. You may prevent the loss of your hard-earned money by adhering to these simple guidelines.