RBI Governor, PM signal reforms in trouble-prone urban co-operative banks
The Hindu
Governor warns depositors against chasing higher returns
Reserve Bank of India (RBI) Governor Shaktikanta Das on Sunday indicated that the banking regulator will ring in sweeping regulatory changes to reform urban co-operative banks that have been plagued by a spate of failures, and warned people against parking their savings in banks offering high returns.
While terming the government’s decision to raise the insured limit for bank deposits to ₹5 lakh from ₹1 lakh with a 90-day time limit to pay out such deposits as ‘landmark’ developments, Mr. Das stressed that the payment of Deposit Insurance should be seen as a ‘measure of last resort’.
“I would like to mention in all this is that the depositors themselves must also be very discerning. It is very important to keep in mind that higher returns are usually associated with higher risks. Just because a bank is offering higher interest, the depositors should be very careful in putting their money in chasing such high returns,” the RBI Governor noted.