[D33-PAC]

I'm not an expert on banking and finance but I do know that the central bank is supposed to prevent from banks from collapsing.


So, very simple question.

What the HECK was the RBI doing ? Is India some joke ? So many bank scams in the last 5-6 years.

Then what's the point of the RBI ?

Recently there was the PMC Bank which had the chairman as a co-conspirator with the business magnate HDIL family who got loans. Then there was the ICICI scandal with Chanda Kochar.

Then there was the IL&FS scandal.

Pathetic man. So pathetic.

[pranavGTI]

Originally Posted by SmartCat

But speculators should NOT buy Yes Bank stock at Rs. 15 or Rs. 10 or whatever. Very likely this sucker is going to zero. Shareholders will be paid only if anything is left over after paying back the depositors (customers) and bond holders.

100%. As the Yes bank news started coming up since last year, almost all foreign investors sold their shares. Majority of those were purchased by retail investors who wanted to make quick money. They are stuck with despair. IMHO the money that SBI and LIC would invest in YES bank would be insufficient. For now it is better to stay away from Yes bank and keep watching.

[srini1785]

Banks failing is not restricted to india alone. Lehman brothers failed and led to a chaos back in 2008-09. However, that was due to over exposure to a housing bubble. Yes bank failure seems to be due to a culpable scam by the founder to defraud public. Even more worrying is why should SBI and LIC come to the rescue?. My point is that such rescue would only make the rescuer more vulnerable. After all LIC/SBI are as an institution trusted beyond belief. How many more such banks can they rescue?.

On a side note :

Age old wisdom of burying money in a cement vault below ground covered by a foot mattress is gaining momentum in many parts of india after all these scams . Apartment owners please find another solution.

[thisissoumya]

Originally Posted by bvasista

I have read in this thread that NOT to buy any shares/stocks of Yes bank even though it is currently going at 15 - (today 18). Was thinking to buy now.

Is it not a good idea to buy now since SBI has decided to come in?

In accounting terms yes bank share value is ~0. Because whenever the loss of any firm becomes greater than the equity the shareholders get nothing as the equity value is used to cover the loss.

In case of Yes Bank the equity value is going to substantially lower than the loss that they are going to report in their Q3 FY 20 result. That is why they have delayed the result announcement which will be out on 14th March.

Now the question is why the stock is trading ~20. That is because there are buyer and sellers in the market available to trade at that price. Nobody currently knows what the share price is worth currently.

Therefore it is my request to every retail investor out there that do not try to trade/Invest in Yes Bank unless you are ready to loose the entire money. Please take an expert advise before doing so.

I have been tracking Banking stocks in general and Yes Bank in particular since the start of my career as a Fundamental analyst. So I am aware about a lot of risks which a common retail investor can not see. SBI has stepped in first to bail out the depositors. What will be the fate of the existing shareholders that information is not there at least on the RBI's draft plan as of now.

Bottom line - Putting any money on Yes Bank share is not worth the risk. If you want to make money from stock market then there are a lot of brilliant quality companies available @ reasonable valuation post the massive fall we have seen recently. Please take expert advise before investing.

[philipmathen]

One thing that has taken a beating is the RBI and their repeated failures. They have a say in appointment of the MF and other too management of every bank. Add to that numerous audits.
Bottom line is, they are simply not equipped/ do not want to.

One good measure of the health of a bank is it’s capital and how easily it can raise fresh capital. Banks where raising fresh capital is an issue is a warning sign that investors may have got wind of something unsavoury. But that’s only one measure. Unfortunately, every depositor cannot be expected to analyse the health of a bank. That’s what we have regulators and rating agencies for. But, if the events for the past 10-15 years are any measure, these are just lip service and do not seem effective.

Saw some doubts being raised about the newer banks, and honestly, all our trusted names were new at some point. But more importantly, if it’s higher rates, very simple options like a Public Provident Fund will give you rates better than a bank and are considered safer because it is fully guaranteed by the Central Government. Minimum deposit is Rs.500, max Rs1.5L in a year. Initial term is 15Y. A simple google search will give you brief details:

https://www.taxcorner.co.in/p/public...-2019.html?m=1

I have been a regular investor in PPF, it’s not a great return compared to the equity markets, but you have complete peace of mind, and it is fully exempt from Income Tax on maturity as well.

[thisissoumya]

Originally Posted by beat runner

I am an impacted party here. Yes Bank is our (me+wife joint) primary account for FDs and stuff. Guess should have read the signs early and shifted our funds.
Though, this leaves a question - after paying taxes through nose, whatever we save, if that is not secure in a bank of this size, what are people supposed to do? The government machinery shouldn't be held responsible for reaching this level and not taking any actions well in advance?

Being a Banking analyst for last 7-8 years all I can say is please be assured that your money in the bank is safe and soon you will be able to use/withdraw it. Yes Bank is a big scheduled commercial bank and that is the primary reason why the resolution is happening at a rapid pace. Longer the bank remains under moratorium bigger the collateral damage for the financial sector and economy.

We did not see this promptness either from RBI or Govt in case of PMC bank crises because it is a co-operative bank and regulated partly by RBI and partly by the state. So obviously nobody takes responsibility of the mess and in India we know how people have the inclination to wash off their hands conveniently in stead of solving an issue.

Originally Posted by beat runner

Guess should have read the signs early and shifted our funds.

If you are not from finance background I do not think it was easy to read the signs of problem of this magnitude. But yes, you should have shifted part of your funds to another bank just to avoid any unforeseen risk. But again I would say - Please Don't loose sleep over the safety of your deposit and it should be back soon.

In the meanwhile if you are facing trouble for the 50K withdrawal cap then I have nothing more to say than 'Sorry'

I am also an impacted party here because a part of my long term fund is parked in Yes Bank. I am a loss making shareholder of Yes Bank and also my wife is an employee of Yes Bank. Hence a lot @ stake. Let's hope for the best.

[mukeshgoel]

YES Bank customers can pay credit card dues, clear loan obligations from other bank accounts

The bank said that it has enabled inward payments through IMPS/NEFT and customers can make payments towards their credit card dues and loan obligations through other accounts.

https://economictimes.indiatimes.com...w/74560964.cms

[nagr22]

Originally Posted by mukeshgoel

YES Bank customers can pay credit card dues, clear loan obligations from other bank accounts

This is outright ridiculous! Why should I pay my Yes bank credit card dues from 'other' bank accounts when our money is stuck in Yes bank itself?? It would have made sense had they decided to let us pay from Yes bank!

[MDED]

Whenever there is promise to pay more, the risk is also more. Hence, Yes Bank had depositors across the length and breadth of the country. Tirupati Tirumala Devasthanamas (TTD), The Jagganath Temple Trust of Odisha, aam aadmi, they all had deposits with Yes Bank. The principal reason was the lure of higher rate of interest. TTD withdrew all their money last year on the advice of their board member, who is none other than ex RBI Gov. Shri YV Reddy.

Coming to the query of whether you can buy the Yes Bank stocks, then I think it will be closing your eyes and driving your car hoping that you wont hit anybody and reach your destination on time. Hence, AVOID

I think your money will be safe in any commercial bank having Pan India presence with sound fundamentals. But, how many Banks in India have sound fundamentals or their board are strong and knowledgeable? I think the muck is not controlled by RBI. They are the biggest agency responsible. RBI works from Monday to Friday (10-5) and asks banks to work round the clock! RBI takes truckloads of data from the Banks in the name of compliance, and what they do with this data, NOTHING!

Some media houses have become the Pundits of Banking and doing some lousy analysis to prove their salt, which I feel is absolute farce and they are adding fire to the chaotic situation in the market. Place your despots in any Govt. Owned Bank and trust me your deposits will be safe, notwithstanding the fact that these banks have weak Balance Sheets, these Banks are owned by the President of Republic of India and sovereignty guaranteed by the GOI. I agree there might be some lacuna in their services, but with young officers working in these Banks and competition from Private Sector Banks, these banks have also buckled up for giving excellent customer service. Moreover, many of you struggle to register your property at SROs, get licenses at RTOs, etc, because of the Babu type attitude of the staffs of these organizations, but we curse and bite this sour pill.

In comparison compare a sarkari banker, who's job is dealing with your money, advising you the right product mix of investments, etc. Achieve out of the world targets set by their controlling offices, work for extended hours, no incentive to talk of, getting transferred every 3 years to a new city, new branch and yet trying to bring happiness to you. Hence, occasional rift may happen, but in the larger interest of your own money's safety, please bear with them and trust the PSBs!!!

SBI, PNB, BOB, UBI, CANARA BANK, IDBI Bank, etc.

[Pequod]

Originally Posted by MDED

In comparison compare a sarkari banker, who's job is dealing with your money, advising you the right product mix of investments, etc. Achieve out of the world targets set by their controlling offices, work for extended hours, no incentive to talk of, getting transferred every 3 years to a new city, new branch and yet trying to bring happiness to you. Hence, occasional rift may happen, but in the larger interest of your own money's safety, please bear with them and trust the PSBs!!!

SBI, PNB, BOB, UBI, CANARA BANK, IDBI Bank, etc.

Been a pretty long time since I saw someone empathising with a PSB officer for the right reasons, and makes me wonder, are you one?

Disclaimer: I am!

[am1m]

Originally Posted by MDED

I agree there might be some lacuna in their services, but with young officers working in these Banks and competition from Private Sector Banks, these banks have also buckled up for giving excellent customer service.

Originally Posted by Pequod

Been a pretty long time since I saw someone empathising with a PSB officer for the right reasons, and makes me wonder, are you one?

I don't work for any bank, but have been banking with SBI for over 30 years (my mom opened some sort of kids/joint account thing for me when I was a kid) and a couple of private banks- Citi and HDFC for about 10 years each. And I MUCH prefer SBI I can tell you!

All I need is no-frills banking- I give you my money, you make it work for you and keep it safe for me. SBI does just that and leaves me alone. Both Citi (really, the worst bank around, really deserves the 'shittybank' nickname) and HDFC keep spamming me, keep bombarding me with messages and calls for services I don't need and that I have repeatedly told them I don't care to be contacted for. When I have an issue, the legions of untrained call-center jokers each of them employ can really do nothing useful to help, neither can their so-called 'personal bankers'! Whereas, with SBI, I do need to visit their branch to sort things out, but I've never left without getting it sorted out. And I've seen first hand, SBI services improve over the past decade. I'd rate it better than either of the other two banks I've used.

If I didn't need to have a salary account, I would never have opened either of those private bank accounts. I never understood why companies need to restrict the banks where they deposit employee salaries. I mean it's just a set of standing instructions to account numbers, so why not any account number? I know there is a lot of mumbo-jumbo that HR, fed that nonsense by the banks keeps giving us - "zero-balance, personal banking, free this, free that..." but was never convinced.

[MDED]

Originally Posted by Pequod

Been a pretty long time since I saw someone empathising with a PSB officer for the right reasons, and makes me wonder, are you one?

Disclaimer: I am!

Hell yes, I am also a PSB scale -3 officer having put in 11 years of service in Liability, Advances, RO, ZO, etc.

Originally Posted by am1m

All I need is no-frills banking- I give you my money, you make it work for you and keep it safe for me. SBI does just that and leaves me alone. Both Citi (really, the worst bank around, really deserves the 'shittybank' nickname) and HDFC keep spamming me, keep bombarding me with messages and calls for services I don't need and that I have repeatedly told them I don't care to be contacted for. When I have an issue, the legions of untrained call-center jokers each of them employ can really do nothing useful to help, neither can their so-called 'personal bankers'! Whereas, with SBI, I do need to visit their branch to sort things out, but I've never left without getting it sorted out. And I've seen first hand, SBI services improve over the past decade. I'd rate it better than either of the other two banks I've used.

SBI, with the recruitment of lot of young guns is the most practical Bank in India. I think in our Indian family, somebody or else will definitely have an account with SBI. With many young officers as Branch Managers in SBI, their services and customer satisfaction has improved drastically and will keep improving.

[ashokrajagopal]

Originally Posted by am1m

If I didn't need to have a salary account, I would never have opened either of those private bank accounts. I never understood why companies need to restrict the banks where they deposit employee salaries. I mean it's just a set of standing instructions to account numbers, so why not any account number? I know there is a lot of mumbo-jumbo that HR, fed that nonsense by the banks keeps giving us - "zero-balance, personal banking, free this, free that..." but was never convinced.

It started as a means to gain liquidity and access to market. For any HR system, there is practically no restriction on which account your salary should get credited to. But the Employer company chooses a bank more or less as a partner in return to some specific services for the employer's business accounts. For instance, Infosys and ICICI was a well known relation with personnel sitting across boards. Its a guaranteed customer base to sell credit cards and other products to that comes with a a salary account.

[ValarMorghulis]

Originally Posted by am1m

I don't work for any bank, but have been banking with SBI for over 30 years (my mom opened some sort of kids/joint account thing for me when I was a kid) and a couple of private banks- Citi and HDFC for about 10 years each. And I MUCH prefer SBI I can tell you! ...

Originally Posted by MDED

...SBI, with the recruitment of lot of young guns is the most practical Bank in India. I think in our Indian family, somebody or else will definitely have an account with SBI. With many young officers as Branch Managers in SBI, their services and customer satisfaction has improved drastically and will keep improving.

I have an account in all three:

Citibank-No frills, convenient. FD interest rates suck and it spams a LOT with emails. Credit Card is nothing special.
HDFC-My first salary account and I have maintained it for more than a decade now with a good relationship. FD rates are better, if not the best. Credit Cards are good. Very convenient.

SBI-Most reliable bank. FD rates suck the most but it is the most dependable one.

My grouse is with the SBI staff. Two instances:
Year 2012: Went for an education loan and the staff behaved as if I asked for their kidney! The guy told me it'll take a month to process it and ignored. You already bend over backwards but that atittude was too much to take for me. This was in Delhi.

Year 2019: Wanted a locker in the bank nearby. Requested the bank manager who first acted like a king. Then said I need to invest in couple of financial instruments: FDs and life insurance. I already have 10 FDs so that was not a problem. He refused to budge on the life insurance and told me that I need to get the form for locker from the head office. They will stamp and sign and then I need to take the form back to the head office. All this in a really haughty attitude. Fed up I left. Did not open a locker. This was in Bangalore.

My only positive experience in SBI has been for the home loan. The staff was very cordial and helpful. They clarified all my doubts and cleared the loan proceedings and disbursed the amount in less than 10 days.
That said, SBI is still the most trustworthy and they know it.

[Pequod]

Originally Posted by MDED

Hell yes, I am also a PSB scale -3 officer having put in 11 years of service in Liability, Advances, RO, ZO, etc.

Takes one to know one, right . Am going on my 16th year now, and how this industry has changed is amazing. All the accountability, and none of the perks.