US can learn from RBI, ICICI Bank was saved in 2008

The crisis triggered by the collapse of the Lehman Financial Institution in the year 2008 shook the banking system around the world. (Banking System) was shaken, then the domestic banks in India appeared quite safe. RBI ICICI Bank (ICICI Bank) was saved from drowning. A few years ago, the rescue of Yes Bank is also a great example in front of the world.

In such a situation, RBI to the rest of the central banks of the world including America (Reserve Bank of India) There is a need to learn a lot from how the central government of India takes steps to save its banks and protects the money of the common people. That’s why last week when Silicon Valley Bank (Silicon Valley Bank) And the Signature Bank of the US collapsed, so even after global interconnections in the financial sector, Indian banks did not appear to be affected as much.

no such system in india

The failure of SVB is not going to affect Indian banks much, because the balance sheet structure of domestic banks is slightly different. A senior official of a government bank said that there is no such system in India, where deposit amounts can be withdrawn in such large volumes. The banker said that unlike in the US, where a major chunk of bank deposits are from corporates, a major chunk of deposits in domestic savings banks in India are from households.

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Government came forward to help

Today, a major chunk of deposits are with public sector banks and the rest with very strong private sector banks like HDFC Bank, ICICI Bank and Axis Bank. Hence, there is no need for the customers to worry about their savings. Whenever banks faced any problem, the government came forward to help them. If experts are to be believed, trust is an important component in banking. If the trust is 100% then you do not need any capital and if the trust is gone then no capital will save you.

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yes bank rescue

Speaking to The Indian Express, Rajnish Kumar, former chairman of State Bank of India (SBI), said that the approach of regulators in India has been to protect depositors’ money at any cost. The best example of this is the rescue of Yes Bank, which was provided with a lot of liquidity. However, the SVB issue created panic in the stock markets, affecting bank stocks and investors lost money in the process.

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ICICI Bank Crisis

On September 30, 2008, when the global financial crisis was at its peak, Finance Minister P Chidambaram and regulators SEBI and RBI did a lot to calm the financial markets, when the benchmark Sensex fell 3.5 per cent and hit a two-year low. Had come to the lower level. At that time the customers of ICICI Bank were in the grip of this and in some cities they were queuing up outside the ATM to withdraw the deposit amount.

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RBI saved ICICI Bank

During that time the country’s Central Bank had said in its statement that the country’s largest private bank was safe and there was enough liquidity in the current account of the central bank to meet the requirements of the depositors. On the safety of individual banks, the central bank had said that RBI has made adequate cash arrangements at ICICI Bank branches and ATMs to meet the demands of its customers. ICICI Bank closed with a gain of 8.4 per cent that day.

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Present condition of banking sector

Due to the current crisis, there has definitely been a decline in the government and private stocks of the country. Shares of SBI, PNB and BOB have seen an average decline of 7 per cent since March 8 till March 14. On the other hand, talking about private banks, the shares of HDFC Bank and ICICI Bank have fallen by more than 4 percent. The Bombay Stock Exchange’s Bank Exchange has seen a decline of 5 per cent till March 14 and Bank Nifty has also seen a decline of 5.20 per cent.

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