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I saw on news that banks in India are under losses.

  • I was just wondering, are banks in India federally insured?
  • What happen if banks like Yes Bank or IndusInd bank goes bankrupt?
  • How will we recover money in those cases?
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I was just wondering, are banks in India federally insured?

Yes the Banks in India are insured for Principal and Interest upto Rs 1,00,000/- per holding type per Bank. See the DICGC website. So if you have one or more accounts [in the same or different branches of a bank] and the Principal is say Rs 98,000/- and the interest accrued at the time of liquidation is say Rs 4,000/- you will get Rs 1,00,000/-

If you have more than Rs 1,00,000/- you will not get only 1 lac. If you have an individual account, and your wife has an account and both of you have a joint account. The total limit will be Rs 3,00,000/-. If you are guardian to your Children, its again considered separate. RBI Site as a good example on this. If you open Accounts in Different Banks, the limit increases.

What happen if banks like Yes Bank or IndusInd bank goes bankrupt?

Both Yes Bank and IndusInd are participants in the DICGC and are insured. See the full list here.

How will we recover money in those cases?

Although insured, the process to get the money back would be time consuming. More often the bank is placed under moratorium, an effort is made for amalgamation or reconstruction ... Only if everything fails, the bank goes into liquidation. So it could be anywhere from few months to few years for you to see you money.

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