After PMC Bank and Yes Bank, Lakshmi Vilas Bank (LVB) becomes the 3rd Bank in less than a couple of years to collapse. The Reserve Bank Of India has forced Lakshmi Vilas Bank to merge with DBS Bank India which has led to restrictions on withdrawing money. The account holders cannot withdraw more than Rs.25,000 which applies to all accounts.
This is the first time in Indian history the RBI has tapped a bank with a foreign company to protect an Indian rival. On the surface level, the situation isn’t alarming as the restriction of withdrawal is temporary. The restrictions on withdrawal will be lifted once the bank is merged with DBS Bank. But all of this is safe for those who don’t have their money caught up in the bank.
Most of the banks in India are deemed safe, provided they are observed by the RBI. It is safe to say that the bank customers are protected in India at the very least. Still, it would be better to choose the best bank since some banks are safer than the other.
Even though most of the Indian banks are safe as they are monitored by the RBI, You still need to trade carefully and should not pull all the banks in the same league. You are advised to go ahead with the Systematically Important Banks identified by the RBI. The following banks come under the list :
- State Bank Of India (SBI)
- HDFC Bank
- ICICI Bank
If any of them were to be selected for a list of the best safe banks in India then it would be best to select from bigger banks such as State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda, Canara Bank, Bank of India among the public banks and PSU bank, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, Indusind Bank, etc. among the private banks. The list doesn’t mean that these banks are the best and are completely safe, but the aforementioned banks will be protected by the government at any cost so that nothing goes awry.
Opposite to popular opinion, the Lakshmi Vilas Bank was struggling even before the march 2020 lockdown. The subsequent fracture following the lockdown brought down the Tier 1 capital ratio to minus 1.83 % leaving the investor with no options left. DBS has now got 563 branches, 974 ATMs in addition to 1.6 billion franchise in business units.
