44. Safety of Deposits in Indian

Banks

Question: hello how are you. i get your e:mail from Nri information. I have some question with you. i want open my nri account. if i deposit very big amount in my nri account. how i know my money is save in my nri account. I am USA citizen. I am also apply my dual citizen. I want open my business in India. i want settle in India. i will get dual citizen soon. after can i open my business in India. thanks raman garg Answer: Indian bank deposits are insured for only up to Rupees one lakh. No one can offer you a guarantee that your money will be safe in India beyond this amount. When dealing with banks your choice of banks should be based on reputation and research. While deposit insurance in India is, shall I say next to nothing (only around $2000) In the country's history no public sector bank had been closed down, as they were either amalgamated or propped up by the Government. Check here for various banks in India. The Indian Prime Minister Mr. Manmohan Singh stated in the Lok Sabha on October 20, 2008, " I wish to assure depositors in our banks that their deposits are entirely safe" Whether you believe him or not is a decision you will have to make. However people do have thousands of crores of Rupees in the Indian banking system. It all comes down to ones level of tolerance for risk and belief in the system but there are no specific guarantees. The majority of people consider banking to be safe and continue to keep their money in banks. On the other side of the coin banks can and sometimes do fail. Governments can change and banking laws and regulations also are subject to change. Why the Indian government has failed to up the deposit insurance on bank accounts I fail to understand as this will certainly assure Non Residents of the safety of their money. NRIs may find it interesting to note that in a written reply in the Lok Sabha, Minister of State for Finance Mr. Pawn Kumar Bansal said, "92.6 per cent bank deposits are fully protected under the Deposit and Insurance and Credit Guarantee scheme" Surprisingly such a high percentage of people have accounts up to only the insured amount of Rupees one lakh. As for the second part of your question, as an NRI you can open a business in India. You do not need to be a citizen of India for the purpose of opening a business in India. Furthermore India does not allow dual citizenship. The Overseas Indian Citizen is often mis-characterized as 'dual citizenship' is just a lifelong visa.

Manmohan Singh