Which Bank is safe?
The last few days HDFC bank has been in news all over. HDFC is considered to be one of the biggest and safest banks of India and now it is under scrutiny over corporate governance and their internal control issues. The problem is around irregular payment of 45 crores INR, which is a huge amount to be overlooked and not get worried. Yes, I have my account with HDFC bank. Not that I have millions in it, but still, I am worried.
Time and again banks have come up with frauds and governance issues. We think some of these big banks are safe and follow ethical practices but with this one only can think what is really safe these days. The current problem that has occurred with HDFC bank is that they made payment to Maharashtra State Road Development Corporation of approximately 45 Cr INR, and these payments have been booked under internal marketing and promotion expenses. The question is why does a bank pay marketing funds to such an organization. Right now, the matter is under investigation and not actually proven as fraud. The payments are being internally investigated by the Audit teams.
Till then, it is a concern for everyone. The Bank stock has gone down since this news has come out. I am also invested in their mutual funds and the value has drastically dropped. The bank funds and FDs are mentioned as safe but then if such is their internal governance, then it does raise questions of the public. Also considering how many bank frauds keep happening, even a little matter can put people in panic mode. Financial bodies are saying it's a controllable issue but still why such governance issues and misuse of funds should happen. Bank funds are all people and company's funds and there has to be transparency and accountability of it in the fairest manner. Especially banks like HDFC and ICICI which are considered to be the most credible banks in India.
Majority of the Corporates offer salary account with these banks and hence it is their responsibility to keep it safe and not do any unfair governance which can shake people's trust in them.
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