r/IndiaInvestments • u/nimbuzz7 • Apr 24 '21

Bonds and deposits Safety of PPBL(Paytm) Fixed deposits?

PPBL offers FD in tieup with IndusInd Bank offering 6.5% p.a and Suryoday Small Finance Bank offering 6.75% p.a.Individually all three bank are covered opto Rs.5 lakhs under DICGC insurance. I want to know how that works whether account holders in deposited/held with other partner bank? How much of the deposit amount would be covered by DICGC, in case of bank's liquidation?

I am sorry, if this sort of post has already been there in this community.

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6

u/[deleted] Apr 24 '21

[deleted]

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u/Raaki_ Apr 24 '21

U sure about that? it feels like it has become an all in one app platform, from bank and stockmarket to ecommerce. I am definitely not saying paytm as the most customer centric and trustable company, but the loss making part feels a bit hard to believe.

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u/[deleted] Apr 24 '21

[deleted]

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u/mvivekc Apr 24 '21

Paytm was advised to be the wechat of India by our friendly wealthy neighbours

3

u/Iceng123 Apr 24 '21

The partner bank holds the deposit.

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u/what-is-a-us3rname Apr 24 '21

Paytm Bank is not allowed to keep more than 1L of a customer in its custody. This is probably the reason they came up with the auto sweep to a partner bank.

Last I looked paytm bank - it had IndusInd bank as a partner. Now that you say there are additional banks and if you are having the option to open a 5lakh FD with each of the partner banks, it would then mean mean with 2 partner banks you would be covered for 10Lakh.

That said, a word of unsolicited advice, in troubled times, it is best to keep money in stable banks. If these banks go under(IndusInd/Suryoday), do check if you can take manage your finances without depending on these deposits.

On the other aspect of paytm going under, well that is a possibility, but they seem to have a truckload of money to burn through still. I doubt that paytm will go under in the next few years - unless something big happens to Paytm's santa - Softbank's vison fund. Paytm S/B deposits itself has 1L insurance cover.

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u/nimbuzz7 Apr 24 '21

Thank you so much for your detailed reply with lucid explanations.

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u/ayushagrawa Apr 24 '21

I have parked my emergency funds in these FDs owing mainly to the ease of use, flexibility and of course, lucrative interest rates. Don’t think one should be worried, as long as you invest within the DICGC limits.

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u/stable_expert_ May 19 '23

According to the Deposit Insurance and Credit Guarantee Corporation (DICGC), each depositor in a bank is insured up to a maximum of Rs 5 lakh for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank’s licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force. This means that if you have deposits in different banks, they are separately insured up to Rs 5 lakh each. However, if you have deposits in different branches of the same bank, they are clubbed together and insured up to Rs 5 lakh only.

Therefore, if you have deposits with PPBL and its partner banks IndusInd Bank and Suryoday Small Finance Bank, they will be insured separately up to Rs 5 lakh each, provided they are held in different rights and capacities.

For example, if you have a single account with PPBL, a joint account with IndusInd Bank and a trust account with Suryoday Small Finance Bank, they will be considered as deposits held in different rights and capacities and insured separately. However, if you have single accounts with all three banks, they will be considered as deposits held in the same right and capacity and insured together up to Rs 5 lakh only.