PMC Bank: Is Your Money Safe in Banks? | Explained by Dhruv Rathee
Hello friends Think about this: First, the government came up with the Jan Dhan Yojana and instructed everyone to open up bank accounts, which you did! Next, the government brought in demonetization and said this was an attack on black money and corruption You faced a lot of hurdles in withdrawing cash when you went to get your notes exchanged But you decided to endure it as it was an “attack on corruption” Then, after that the government proclaimed (our country to be) “Digital India” Keep no cash with yourselves, deposit all of your money in banks and make use of digital transactions And then, a day came when all of your money was deposited in the banks, but you were unable to withdraw any money How would you feel if this happened to you? Today, lakhs of people in our country are facing this situation The Punjab and Maharashtra Cooperative bank customers have been facing this situation for 20 days “I have no property, I live on rent I have been living in Mumbai for 10 years I have been accumulating money for a long time and was going to buy a house this Navratri” “Is the government for our benefit or for our detriment? This government is trying to destroy us! nothing else.” “Modiji, please have mercy. You have had your way. You’re punishing the poor people again and again You’ve been punishing them so many times that it is difficult for them to live Whose government are you running? Who are you here for? I had never thought… I used to be such a huge follower ..that you could do something like this.” “I voted for Modiji… I used to consider him as God… and all my money has been taken Help me! What are you doing? Give me back my money…” “But today, I am crying and I wish to tell all the Modi Bhakts Andhbhakts (blind followers)- all of you are on the road to perdition Their anger is justified Think about it: What if it had happened to you? All your hard earned money- that you’ve accumulated unit by unit, you put it in a bank for safety But one day, you find out that you’re unable to withdraw your own money that you had deposited in the banks Then, most probably, you’d have reacted the same way Especially when you’d find that the politicians in the government were reacting with utter indifference “One minute” -“Move aside!” – “Let me just greet her.” “Go ahead” “I am only greeting you.” “I had a kidney transplant 57 days ago. I don’t have money for my medicines Arun Jaitley ji and Sushma Swaraj ji have passed away Let her go. It doesn’t matter.” First, the limit was set at 1000 rupees Later it was increased to 10,000 and now finally, it is (set at) 25,000 rupees The customers of PMC bank can withdraw upto 25,000 rupees within a period of 6 months But say if someone has an emergency. How would 25,000 rupees suffice? For those who have deposited their lifelong savings in the banks “Give us our hard earned money back!” “We’ve slogged hard to earn them” “Did we make a mistake by voting for you?” “Modiji bring us back our old days!” You know what’s the unfortunate part? It is the second time in the last two years that I’ve made a video, the title of which reads “Is your Money safe in banks?” Prior to this, I had made a video on FRDI Bill on December, 2017 The bill suggested somewhat the same thing: If any bank becomes bankrupt, then the depositors’ money would be used to bail out the bank Fortunately, people raised their voices against it then Pressure mounted on the government and then the Government decided to withdraw the FRDI bill But a similar situation is arising yet again The self earned money of the people is at risk The story of PMC is that of any other typical bank, seen elsewhere The bank gave out loans to a company, the company was unable to pay back and these loans became bad loans/NPAs But despite that, the bank continued to loan out to the company The company, in this case, is HDIL Later, the links between the bank’s directors and HDIL company were unearthed Even BJP links were discovered as to how the directors of this bank were directly related to the BJP One of them is also a direct member of the BJP Later, how the scam was actually carried out, was also revealed This company had created 21,000 dummy accounts in this bank to show how these small accounts had borrowed small amounts of loans It was done to conceal the fact that all these accounts belonged to the same company And a huge amount had been loaned out which they could not repay This is how they managed to stay concealed from the RBI’s auditing Because while auditing, the RBI analyses only a few accounts, not all of them The total amount of money involved in this fraud is 6,500 crores which were loaned out to the HDIL company, which the latter is unable to repay The total amount of money deposited by the customers in the bank is 11,000 crores And what actions have been taken by the government regarding this? Until now, 4 people have been arrested A former managing director of the bank, a former chairman and two members of the HDIL group Another latest report states that a property worth 3,000 crores has been attached by the BED That is, they probably do have 3,000 crore rupees in the form of property which could be utilized to pay back the depositors But it hasn’t been done yet Infact, no guarantee of getting their money back has been provided by the government to the depositors The protesters are merely demanding an assurance of getting their money back But no such assurance has been provided When our Finance Minister addressed a press conference, she tried to deflect this issue (by saying) that the government was not responsible for this. The issue is being handled by the RBI “And cooperative banks, normally, as all banks are, regulated by the reserve bank of India” “But the rural cooperative banks are registered …but the regulation is done by the RBI” “Similarly, the urban cooperative banks of the state are… regulated by the RBI” “The reserve bank is the one which, takes care of… …The Ministry of Finance has got nothing to do with it because the RBI is the regulator” “and they are doing, what is by law, to be done.” Madamji talks of such wondrous things. When the government has to take an emergency fund from the RBI worth more than 1 lakh crore, then they get it pretty easily because they claim that the money of RBI and the government is one and the same But when there are talks about the PMC scam, then the RBI and the government suddenly become separate entities The government owns no responsibility and everything is managed bay the RBI (but) you cannot convince the depositors in this manner This will make the people more wary And it is justified to be afraid Because, observing historically, last time when such a case had happened, in Gujarat in around 2001-02 There was a cooperative bank named Madhavpura which witnessed a similar scam and it was doomed And even today, 17 years later, the bank depositors have still not got their entire money back The process of returning back their money is still ongoing So you can imagine! Should the PMC depositors wait for 17 years to get their money back? And another thing is that there’s a deposit insurance of a mere 1 lakh rupees in our country That is, if you have deposited a sum of 10 lakh rupees in a bank and that bank becomes bankrupt, So going by the rules, you can get a maximum of only 1 lakh rupees out of that If such dire circumstances prevail, then the insurance provided is only of 1 lakh rupees you’d lose the rest of the 9 lakhs If you compare this deposit insurance with the rest of the world’s, you will notice that India has one of the lowest deposit insurances In Europe, this value is a 100 thousand Euros That is, almost 70-80 lakh rupees of your money is safe in the banks in USA, this value is 250 thousand dollars That is, upto 2 crores of your money is safe in the USA banks And in almost all the countries, this value is extremely high. In India, it is a mere 1 lakh rupees Therefore, I’d like to tell the government that if you want the people to feel safe and secure whenever scams like these happen in our country or in a bank becomes bankrupt, then please increase the Deposit insurance This a very paltry sum. Increase it to the level of atleast 50 lakhs so that everyone feels safe Had this deposit insurance been more in our country, then I don’t think that the PMC depositors need to be worried This would have guaranteed that they would get back their money (at all costs) If you agree with me, then share this video so that more and more people are made aware and the government increases this limit The problem here is that there is no effective communication on the part of the government The government wants us to blindly believe in them But what actually happens is that a common man reads in the newspapers that loans worth 1.45 lakh crores have been written off in the past 3 years and every year these loan write-offs are increasing steadily As you can see in the chart, Loans worth 76,000 crores have been written off by the SBI in the past 3 years So a common man will think what happened in the PMC, could also happen to them someday What do they do in such a situation? The government does not let us keep cash at home Neither does the government own up responsibility when our money is deposited in the banks What do we do in such cases? Some people might think that since there is a deposit insurance of 1 lakh rupees, they could split up the money open an account in different banks and deposit 1 lakh in each account for safekeeping but this would be sheer madness Do you really want the people to open up bank accounts in different places and do all this? You could straight away increase the deposit insurance limit and make people feel secure If you would ask for my opinion, then I would give you two suggestions in general The first suggestion is that try and open your bank accounts in public sector and private sector banks in comparison to cooperative banks Because historically, there are more chances of scams in cooperative banks because they almost always have connections with political leaders because they are supervised by the state government There is no direct supervision by the RBI So try and open up your bank accounts in bigger banks like the State Bank of India because the chances of them getting doomed are negligible This has not happened ever, historically My second suggestion would be that you should deposit some portion of your money in EPF/PPF because that is 100% safe in my opinion the money that you put in EPF/PPF There are certainly some disadvantages to that that you cannot withdraw the money before a certain time limit but the money is 100% safe in my opinion because this money goes to the EPFO trust, even though it is under the government But the EPFO trust does not loan out the money to someone else- it does not function like a bank So, your money is safe there If you liked my video and found it helpful then you can support me on patreon.com/Dhruv Rathee so that I may continue to make such informational videos for you in the future We will meet in the next video Thank you.