Banking sector is collapsing? RBI to file review petition

[erikalui]

With Yes Bank's crisis and PMC's collapse, is the banking sector collapsing now? Just a day back, RBI lost its case but now it seems that the banks only are failing to perform giving out bad loans.

Saving money in bitcoins is better but which bank to trust when converting BTC to INR? SBI may not accept deposits and other nationalized banks also may give trouble so private sector banks were looking good but now I am fearing that with Yes Bank failing, other banks also may fail  


Government says all banks are insured for up to 5 lacs but what about the rest of the money in the banks?

Also, this is another bad news for bitcoin traders: https://tech.economictimes.indiatimes.com/news/technology/rbi-to-seek-review-of-supreme-court-order-on-cryptocurrency/74503555 

[kabit9]

Wow, entire post full of FUD!

The banking sector is not collapsing.  If you have 2 rotten eggs out of 24, that doesn't mean the entire basket is rotten.

Kotak, HDFC and SBI are solid banks with extremely healthy and profitable businesses.

Unocoin and several other reputable Indian crypto businesses have already opened their doors for Indian bank deposits and withdrawals.

Please stop spreading unecessary FUD!

[erikalui]

^What FUD? Go read articles. Yes bank gave bad loans so it's a question asked about the banking sector and it's in news also. I myself have an account with Yes bank.

[kabit9]

So since YES Bank made risky loans the entire sector is at risk? If you get one bad apple, you think the entire apple ochard is rotten? There is no logic here.
I do read articles, but I don't believe every two bit journalist's opinion expressed as a fact..
However you have my sympathies regarding holding an a/c at YES Bank.  I hope RBI will resolve it and you will be able to recover your money.

[erikalui]

^Since my one bank collapsed, I read the news about other banks. I can see the bad loans are 7 lacs+ crores. This doesn't sound pleasing as when you put the money in the bank and bank does a blunder, who can be held responsible? I will hopefully get my money back as they said 5 lacs is insured but feel so bad about other middle-class families who have put their hard earned money in the bank.

[kabit9]

I agree, it is a real shame.  Only Rs. 50,000 can be withdrawn for 30 days, so if someone has crores in Yes Bank, it is scary.

Rana Kapoor will have many questions to answer now.

[pawanjain]

I don't believe that the "whole" banking sector is "collapsing" but yes "few" of the banks are having a hard time in there.
I consider SBI as a solid bank since it is supporting the fall of YES bank by buying 49% of it's ownership, that's what I read in the news.

Also, none of the banks have the rights to freeze any accounts any more or not accept deposits/withdrawals.
So crypto in India is not at risk! We can continue trading crypto in India.

The fall of YES bank is a solid example why we shouldn't trust banks any more with our money.
I just gave this example to my brother and proved him this is why bitcoin is the best thing that has happened in this generation.
The ability to control our own money and use it whenever we want is what we need in the current time period.
Why do you guys bother about banks for crypto to INR transactions when we don't even need any fiat money.
If crypto is globally accepted, we won't need fiat for good. All the transactions can happen in real time crypto to crypto transactions.
If this happens, this would change the world for good!

[akram143]

SC judgement has no relation with YES bank collapse,its all because of giving loans and loans to big companies and they run away from country so it gets defaulted.Freezing others money can be the solution for this?

Wake up guys your fiat is not safe in banks!

[webtricks]

The story of Yes Bank is somewhat different from other private banks. Yes Bank was known as 'Bank of Professionals' back in good days because more than 90% of the loans that it offered were given to industries and big houses. Only minimal portion was given for housing loans or personal loans. Thus, Yes Bank was able to charge high interest rate from industrial giants, due to which it was able to offer high interest rates on saving accounts which were as high as 6.5%!

Yes Bank was high risk and high return bank. It was one of the best performing bank of 2000-2010 decade. However, things changed after the death of one of the founder. It led to internal dispute. Also after 2015, most of the businesses in India are under-performing and since most of the loans were given to businesses, big portion of Yes Bank's loans turned bad.

But the case is not similar for other private banks. HDFC Bank, Axis Bank and ICICI Bank work on the model similar to public sector banks. The interest rates on saving account offered by these banks are 3.5-4% which is at par with public banks. I am doing bank audits from last few years and can tell you that the state of NPA is far better in case of HDFC Bank than most of the public sector banks.

[erikalui]

The story of Yes Bank is somewhat different from other private banks. Yes Bank was known as 'Bank of Professionals' back in good days because more than 90% of the loans that it offered were given to industries and big houses. Only minimal portion was given for housing loans or personal loans. Thus, Yes Bank was able to charge high interest rate from industrial giants, due to which it was able to offer high interest rates on saving accounts which were as high as 6.5%!

Yes Bank was high risk and high return bank. It was one of the best performing bank of 2000-2010 decade. However, things changed after the death of one of the founder. It led to internal dispute. Also after 2015, most of the businesses in India are under-performing and since most of the loans were given to businesses, big portion of Yes Bank's loans turned bad.

But the case is not similar for other private banks. HDFC Bank, Axis Bank and ICICI Bank work on the model similar to public sector banks. The interest rates on saving account offered by these banks are 3.5-4% which is at par with public banks. I am doing bank audits from last few years and can tell you that the state of NPA is far better in case of HDFC Bank than most of the public sector banks.

I have an account with HDFC but what about these banks:

Standard chartered
HSBC
Karnataka Bank
IDBI
ICICI

I am planning to open in SBI and BoB now since I stopped trusting private banks. Opened Yes bank account last year due to high interest rates but am suffering now. Glad that the position is not as bad as with customers of PMC. The banks today had no cash too and entertained only 19-20 people for withdrawals. ATMs also have the same case.

[webtricks]

I have an account with HDFC but what about these banks:

Standard chartered
HSBC
Karnataka Bank
IDBI
ICICI

I am planning to open in SBI and BoB now since I stopped trusting private banks. Opened Yes bank account last year due to high interest rates but am suffering now. Glad that the position is not as bad as with customers of PMC. The banks today had no cash too and entertained only 19-20 people for withdrawals. ATMs also have the same case.

Standard Chartered and HSBC are foreign banks. They have limited exposure in India, won't recommend to use their services for personal banking.

IDBI is LIC undertaking, most of the stake of IDBI will be diluted by government of India along with LIC. Can't say about the future of this bank.

ICICI is good private sector bank just like HDC but since you aren't looking for private bank, I don't think this will be suitable option.

Have no knowledge about Karnataka Bank except its name. So can't say anything about it.

SBI is horrible from the customer point-of-view. It's a typical public sector bank but on the same note, it is one of the strongest bank in India. It is directly audited by CAG and most of the time have healthy financial position.

While Bank of Baroda is my pick if I would be in your place. I audited 2 branches of Bank of Baroda last year and their public dealing was exceptional. It was hard to believe that it was public sector bank. Staff was very humble especially credit department, not only to us but customers too. Also BoB have favorable rating from recent RBI inspection. We also issued clean report to the 2 branches we audited, NPA was hardly 2-5% of total credit lent.

[pawanjain]

SBI is horrible from the customer point-of-view. It's a typical public sector bank but on the same note, it is one of the strongest bank in India. It is directly audited by CAG and most of the time have healthy financial position.

Can you elaborate more on how is SBI so horrible from customer point of view ?
I am a SBI customer and I have been using it since like 5 years of something and never faced a single issue till date.
Things are going smooth. Not to mention about crypto to INR transactions, SBI never gave me any kind of burden.

[~Money~]

Government says all banks are insured for up to 5 lacs but what about the rest of the money in the banks?

it will go in there pockets  =))  

Also, this is another bad news for bitcoin traders: https://tech.economictimes.indiatimes.com/news/technology/rbi-to-seek-review-of-supreme-court-order-on-cryptocurrency/74503555  

 review petitions in India have only a 0.1 percent low success rate.you know indian media they are good in creating fud so just relax and pray for few weeks.

“The three-judge bench heard the arguments that were very qualitative,” noted Mr. Danish. “They based their pro-crypto rulings based on those discussions.  RBI’s review petition can succeed only judges make a mistake unintentionally while passing their judgment. The Supreme Court’s judges do not make such errors. They are very thorough.”

read this article - https://www.newsbtc.com/2020/03/06/top-lawyer-india-central-banks-crypto-ban-fightback-less-like-to-be-successful/

[avikz]

With Yes Bank's crisis and PMC's collapse, is the banking sector collapsing now? Just a day back, RBI lost its case but now it seems that the banks only are failing to perform giving out bad loans.

Banking sector is not collapsing in any way! Yes Bank and PMC Bank are just classic examples of fraud by the management. Both of these banks have given out loans to questionable companies where they didn't have the capability to repay that loan. Ex CEO of ICICI Bank is also charged with same type of fraud. It's a result of a malpractice and certainly doesn't show the actual banking scenario.

Saving money in bitcoins is better but which bank to trust when converting BTC to INR? SBI may not accept deposits and other nationalized banks also may give trouble so private sector banks were looking good but now I am fearing that with Yes Bank failing, other banks also may fail  

Government says all banks are insured for up to 5 lacs but what about the rest of the money in the banks?

I personally don't think that bitcoin has matured enough to be called as a "hedge asset". Gold and property works best in such situations.

Also, this is another bad news for bitcoin traders: https://tech.economictimes.indiatimes.com/news/technology/rbi-to-seek-review-of-supreme-court-order-on-cryptocurrency/74503555 

That is a big pain point. I knew RBI wouldn't let it go so easily! They will file a review petition and try to take this legalities even further so that a blanket ban can be achieved. I am sure, even government lobby will be backing them up. Let's see how it unfolds!

[madhavsinghrajput]

The story of Yes Bank is somewhat different from other private banks. Yes Bank was known as 'Bank of Professionals' back in good days because more than 90% of the loans that it offered were given to industries and big houses. Only minimal portion was given for housing loans or personal loans. Thus, Yes Bank was able to charge high interest rate from industrial giants, due to which it was able to offer high interest rates on saving accounts which were as high as 6.5%!

Yes Bank was high risk and high return bank. It was one of the best performing bank of 2000-2010 decade. However, things changed after the death of one of the founder. It led to internal dispute. Also after 2015, most of the businesses in India are under-performing and since most of the loans were given to businesses, big portion of Yes Bank's loans turned bad.

But the case is not similar for other private banks. HDFC Bank, Axis Bank and ICICI Bank work on the model similar to public sector banks. The interest rates on saving account offered by these banks are 3.5-4% which is at par with public banks. I am doing bank audits from last few years and can tell you that the state of NPA is far better in case of HDFC Bank than most of the public sector banks.

I have an account with HDFC but what about these banks:

Standard chartered
HSBC
Karnataka Bank
IDBI
ICICI

I am planning to open in SBI and BoB now since I stopped trusting private banks. Opened Yes bank account last year due to high interest rates but am suffering now. Glad that the position is not as bad as with customers of PMC. The banks today had no cash too and entertained only 19-20 people for withdrawals. ATMs also have the same case.

There is no way that banking sector is in or was in crisis at any point.
As long as all regulatory bodies and private sector are answerable to RBI there won't be any problem to people in terms of getting there money back.
Incident of banks like PMC bank and YES bank occurs due to corrupt mind sitting at the highest position as they have the direct access to the balance sheet of these banks.
But Banks like Yes bank who has such large customer base and has direct access in the entire country, RBI and government won't allow them to fail and example is already in front of you as these banks are pillars of banking and financial sector and failing of these banks defines the trust factor of customers,government know it and customers can be assured of that.
Now that you have mention about these banks
HDFC is the currently top bank in world with trillions of dollor market capita and it's balance sheet has now seen not single defaulters in last three years.There loan system is very effective and doesn't give unsecured higher loan.Soo is ICICI bank
HSBC is the sixth largest bank in the world and has multinational customer base majorly known for its investment in major companies rather than retail banking.
KARNATAKA bank are co-operative banks,RBI is direct authority for any major transaction. 
Questioning whole sector on such incidents is wrong is what i think.
One more thing don't conclude future of banks on scams rather take your decision on the basis of LSP(LIQUIDUTY,SOLVENCY,PROFITBLITY) theory of balance sheet of each bank.

[Sahyadri]

With Yes Bank's crisis and PMC's collapse, is the banking sector collapsing now? Just a day back, RBI lost its case but now it seems that the banks only are failing to perform giving out bad loans.

Saving money in bitcoins is better but which bank to trust when converting BTC to INR? SBI may not accept deposits and other nationalized banks also may give trouble so private sector banks were looking good but now I am fearing that with Yes Bank failing, other banks also may fail  


Government says all banks are insured for up to 5 lacs but what about the rest of the money in the banks?

Also, this is another bad news for bitcoin traders: https://tech.economictimes.indiatimes.com/news/technology/rbi-to-seek-review-of-supreme-court-order-on-cryptocurrency/74503555 

YES bank collapse was more of a governance issue rather than banking sector being in crisis. It is somewhat similar to the Chanda Kochhar case where the individual becomes bigger brand than the bank itself and determines the decisions. Rana Kapoor was made to resign in 2019 by the RBI because of that only. But the damage was done by then. Still the corporate governance issue was there which lead to another exit of the independent director. The governance issue is actively being handled by the RBI.

So, the sector isn't in the problem. RBI is pretty much regulating everything. It was just because of a few people. The economic slowdown along with these banking crisis is just making it look big.