According to a State Bank of India research smaller bank deposits in the United States are less protected than in India. The smaller bank deposits are insured in the U.S upto a maximum of 40 per cent while in India the deposits with the regional rural banks, cooperative banks, and local area banks are better insured at 82.9 per cent, 66.5 per cent, and 76.4 per cent respectively.
Titled, Ecowrap, the research by the State Bank of India's Economic Research Department, was carried out after analyzing insured customer deposits across multiple geographies. It revealed that US's top 10 banks' deposits are insured in the range of 38.4-66 per cent. Top US banks' deposits on an average, have been insured to the tune of around 50-55 per cent.
Author of the report, Soumya Kanti Ghosh, group chief economic adviser, State Bank of India, said. "Further, our ratio of foreign claims to domestic claims is also least among countries signifying that our banking and financial system is very disciplined and no international balance sheet contagion can start from India. Maturity wise also, International claims on India are the least among major countries."
The findings come just days after RBI governor Shaktikanta Das said that India's banking system continues to be stable and resilient despite the recent tremble in the banking sector globally.
"We feel the fissures of the present shock, after a year of war and three years of the pandemic, may prove to be quite a costly affair for the health of beleaguered European banking system going forward even as ECB continues branding Euro area banking sector as resilient, with strong capital and liquidity positions, as on September 2022, not factoring the rise in borrowing costs and the resultant decline in demand, along with tighter credit standards, all leading to a vortex,” Ghosh added.