The Seen and the Unseen - hosted by Amit Varma cover image

Ep 323: SVB, Banking and the State of the Economy

The Seen and the Unseen - hosted by Amit Varma

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The Consequences of Bank Concentration in India

Depositors leaving 40 billion dollars is 3.2 trillion rupees or 3 lakh, 20,000 crore in Indian units, and this calls for rethinking traditional conceptions about bank deposit stability. Also, electronic systems have changed the nature of bank runs, as seen in the recent example of customers continuously moving money out of a bank over a weekend. The concentration of primary balances in a single bank, like Silicon Valley Bank, can fuel the speed of money being withdrawn. This highlights the need to reassess traditional ideas and be prepared for the changing banking environment.

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