SBI issues circular, warning bell for SBI account holders - YP Buzz

YP Buzz - 

              @TheOfficialSBI which happens to be the official twitter handle of the largest bank namely the State Bank of India put out a tweet that informed the account holders about the changes in the deposit amount insured under the deposit insurance & credit guarantee corporation of India scheme (DICGC).

State Bank Of India

The details provided by the official tweet as well as the confirmation provided on the website suggest that customers holding deposits in the state bank of India have insurance from the deposit insurance & credit guarantee corporation of India scheme (DICGC) up to an amount of only 5 lakh INR.

State Bank of India

All the bank deposits are protected under the insurance scheme while some limitation is put forth and condition have to be considered and are listed below -

  • variety of deposits namely savings, recurring, fixed, and many more are covered. 
  • deposits of all the account holders are insured up to an amount of 5 lakh INR. As per the SBI web portal, the 5 lakh INR happens to be both the interest received on the principal amount along with the principal amount in count towards 5 lakh INR and this is valid until the bank license intimate cancellation or a merger or liquidation comes in force.
SBI happens to be the largest bank in India. On 8 May 2020 a circular stating the reduction of the MCLR by 25 bps throughout tenors. MCLR for a year of SBI has been dropped to 7.00 % right away from 7.25%  per annum which will in effect from 10 June 2020. And this happens to be a regular reduction for the thirteenth time.
State Bank Of India

The base rate for SBI has also been gone through a reduction from 8.15% - 7.40% which also happens to in force from 10 June 2020. Also, SBI has been firm on the reduction of the repo rate by 40bps to the borrowers. 

  • 1 July 2020 the EBR dropped to 6.65% p.a from 7.05% p.a
  • 1 June 2020 the RLLR dropped to 6.25% p.a from 6.65% p.a
The SBI didn't forget to mention that the home loans associated with the MCLR will be cheaper by INR 421 while the home loan linked to the EBR/RLLR will be discounted INR 660 for the approx amount of 25 lakh for a time period of 30 years.

State Bank Of India

17 June 2020 around 3.00 pm happens to be the day for holding the general meeting via video mediums as per the direction of the ministry of affairs and the SEBI. In a further report, DICG covers all deposits that includes savings, fixed, current, recurring and many more except the following -
  • Foreign government deposits
  • Central/ State government deposits
  • Interbank deposits
  • Deposits related to the State Land Development Banks with the State co-operative banks
  • Due amount on any account and deposits received outside India
  • Any amount of with the previous approval of Reserve Bank Of India which has been specifically exempted by the corporation.
Then further bank also stated that deposits up to Rs. 5 lakh are insured in the bank. Due to this declaration from the bank, people who blindly trust banks got scared and worried about their deposits.
The fear for deposits is on the rise as many bank frauds surfaced namely Punjab National Bank, Yes Bank, ICICI Bank, Punjab & Maharashtra cooperative bank and many cooperative banks made it to the headlines in the last few years. And when SBI official handle announced the news it came as a shock for many and a question arose as to where the hard-earned money can be stored safely? And amid the pandemic, such a decision by the bank will prove fruitful or the banks are on the verge of losing money will be decided in the coming few days. 
December 2020 is the predicted time for the banks to recover from the economic disruption as even though coronavirus vanishes the stains remain and need to cleanse. 

Thanks & Regards,
YP Buzz

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