Perhaps there is no doubt that in the last few years, online transactions have replaced cash. Payment is done easily through UPI and there is no hassle of carrying cash. All that is required is that you have money in your bank account, after which you can do online transactions. But have you ever wondered what will happen to your money if your bank goes bankrupt or is on the verge of closure for any other reason? Did you receive the money deposited in your account? So let's try to find the answers to all these questions. You can learn about this further...
What is the reason behind bank bankruptcy or closure?
When a bank's liabilities exceed or exceed its assets, the situation of not dealing with this crisis is called bankruptcy. If you understand it in simple words, the expenses of the bank start becoming much higher than its earnings. Due to this, the bank has to suffer losses and then if it does not recover from this, the bank goes bankrupt, hence the regulators decide to close that bank.
How much money do customers get when the bank is closed?
If a bank is closed, then under this rule, the Deposit Insurance and Credit Guarantee Corporation i.e. DICGC, under the Reserve Bank, provides insurance cover to the customers on the amount deposited in their bank account.
Under this cover, Rs 5 lakh is given to the customers in case the bank collapses. Even if you have Rs 10 lakh or more deposited in your bank. Only the amount of account holders of a failing bank is insured up to Rs 5 lakh.
RBI takes these necessary steps
Whenever a bank sinks in the country, keeping in mind the customers, RBI and the government together merge the failing bank with a bigger bank. This saves customers from losing money. This has been seen on many occasions in India.
(PC: ISTOCK)
