No, your bank is not permanently shutting down.
Recently, you must have come across a WhatsApp message, which lists nine banks that Reserve Bank of India will apparently shut down. The message ends with a warning for readers to manage their cash immediately. This inevitably is creating a chaos, with people worrying about their accounts with these listed banks. However, turns out this is just a half baked truth. So before you freak out, know what this is about.
This WhatsApp message in question lists Corporation Bank, UCO Bank, IDBI Bank, Bank of Maharashtra, Andhra Bank, Indian Overseas Bank, Central Bank of India, Dena Bank, and the United Bank of India. According to the forwarded message, these nine banks will be permanently shut down by the central bank, and that people should “take suitable action in respect of your cash in your account (all types).”
However, the truth being, Reserve Bank of India can not actually shut these banks down, even if it were to; these listed banks are owned by the government of India. Reportedly, there is no discussion of any permanent shut down of these banks, but they are going under a Prompt Corrective Action (PCA) invoked by the Reserve Bank of India. The PCA is essentially meant to have a bank focus on their recovery of bad loans. And despite going under the PCA, there is no restriction on taking deposits or giving out loans for these banks. ALSO READ: Beware! Message claiming WhatsApp, Facebook to start billing for usage is a hoax
It has also been rumored that a number of Public Sector Undertakings (PSU) Bank are to go under a merger or consolidation, with other stronger PSU Banks, similar to the recently concluded SBI associate with parent company. Apparently, the government’s objective is to reduce the 21 PSU banks to 12, in order to have a few but strong PSU banks. ALSO READ: Beware! Fake messages circulating on WhatsApp inviting users to try voice calling feature
Regardless, in this process of merger and/or PCA, a depositor’s interest will no where be affected. Thi is in line with the recent statement by Reserve Bank of India Governor Urjit Patel who has said that the Indian banking system could be better off if some public sector banks are consolidated to have fewer but healthier entities, as it would help in dealing with the problem of stressed assets. ALSO READ: Beware! WhatsApp message of PM Narendra Modi offering free Rs 500 recharge is a hoax