Reserve Bank of India / How healthy is your bank, why does RBI trust these 3 the most?

Reserve Bank of India: From time to time, such cases come to the fore in the banking sector in India, when RBI (Reserve Bank of India) imposes restrictions on a bank due to its deteriorating financial condition. Such examples are in front of us from Punjab and Maharashtra Co-operative (PMC) Bank to Yes Bank. Now once again 'New India Co-operative Bank' has been banned. In such a situation, the biggest question is how can you know how safe your bank is and who does RBI trust the most?

RBI's Regulatory System

The Reserve Bank of India monitors the functioning of all banks in the country. RBI adopts several methods to review the banking sector:

On-site inspection - RBI officials check the financial position and books of the bank.

Off-site surveillance - The asset quality, capital adequacy and risk taking capacity of the bank are analyzed.

Warning and corrective measures - When a bank is found to be in a bad condition, it is issued a notice and asked to improve from time to time.

If the bank fails to improve its financial position in time, then a ban is imposed on it. Therefore, as a customer, you should keep an eye on the notices and media reports issued against the banks.

Deposit Insurance Scheme: Security cover of up to Rs 5 lakh

If RBI imposes a ban on a bank, then also customers need not panic. In India, under the Deposit Insurance and Credit Guarantee Corporation (DICGC), every depositor gets insurance cover on deposits up to Rs 5 lakh. This means that even if the bank closes down, your amount up to Rs 5 lakh will be safe.

India's three most trusted banks

• There are three banks in the country on which RBI has the most trust. These banks have been placed in the Too Big To Fail category, which means that their financial position is so strong that the possibility of their sinking is almost negligible.
• State Bank of India (SBI) - India's largest public sector bank, whose wide reach and financial stability make it the safest.
• HDFC Bank - The largest private bank in the country, known for its strong balance sheet and efficient management.
• ICICI Bank - Another leading private bank, considered safe due to its financial strength and digital banking capabilities.

Conclusion

Transparency and awareness are very important in the banking sector. Customers should keep an eye on the financial position of their bank and take the warnings issued by government agencies seriously. At the same time, the banks which are placed in the list of Too Big To Fail are considered the safest.

If you want to keep your money safe, then opening your account in these three big banks can be a good option. Also, keeping an eye on banking related news and understanding the benefits of the deposit insurance scheme of Rs 5 lakh will help in securing your financial future.