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Keeping faith in the system- Should I or should I not?

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I grew up in a middle class family and knew that we need to do a lot of hardship for leading a good life. Leading a good life means, owning a house, car, do some investments, health insurance etc., etc. For a long time my family had been saying, we should buy a house. I was against it but finally gave in. But before booking any house, we had to think a lot where do we invest as there are lot of builders who just take the money and don’t give house on time. We have seen a lot of ups and downs in real estate market, but then as a middle class person, I need to have a house to safeguard my family and their future.

So, after much research and thinking, we bought a house in NCR with a heavy loan and invested my complete savings over there. Over the period of time, things started changing in real estate market as RERA kicked in, Central & Local Govt. changed and Supreme Court started bashing the builders and putting them behind bars. But still, there’s always a worry within us, what if we don’t get the house on time. We need to pay EMIs, heavy EMIs.

Few days back, “Bail-in” clause was to be introduced in our banking system. Having in touch with financial markets, I know a thing or two about “Bail-in” clause and was very hard for me to convince my father-in-law that such a condition will not come in India and the FDs which he has made in bank are still safe. We were thinking on those lines and then suddenly PNB’s scam came into picture and focus shifted on the NPAs of the banks and the scam amount, which is growing day by day. My father-in-law again called and this time it was hard for me to convince him about this situation. I still believe, this situation may not come India, but I also remember this happened in Cyprus during financial crisis in 2012-2013, where bank took the 50%~ of the uninsured deposits and returned rest to the investors.

Back of my mind, all these things were running but was happy that EMIs are less as interest rates were lowered by the banks. But as the NPA discussion became more prevalent in the country, banks increased the lending rates, which might impact our EMIs. So, it comes as no surprise that banks are trying to recover all those NPAs from those honest people who are paying their loans/EMI judiciously.

In a nutshell, as a middle class person, I need to research before investing my hard earned money in a house. After investing, I need to worry about my EMIs and pay more even though central bank is reducing the rates, because the banks handed over the money to some people who looted it and went bankrupt or ran off from the country. Before I put money in bank in FDs, I need to think whether those are insured or not. If not, how can I save it from “Bail-in” clause.

I do not blame Govt. for it or the RBI for that matter. But I do get worried, where do I keep my money. Whether I keep it in bank, the system which we entrusted for years or keep it with me in cash form (which is least likely). But then, what do I do? Do I trust this system and give it a try or not?

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