The fall of PMC Bank reflects on the financial illiteracy of Indian citizens

After the PMC Bank went bust recently in India, I've observed that many people are blaming the RBI and government of the day for that. This is not just laughably naive, it also shows how little knowledge about commerce and economics lay people have in this country.

Caveat Emptor or Buyer Beware is a basic principle in Commerce. It is not the government's job to ensure that you purchase the correctly priced nappy for your children and you are getting the right quantity of Parle-G biscuits for the price you pay.

Or for that matter, if you put your trust in a wrong co-operative bank (despite it having become common knowledge at this point that co-operative banks are looters), what can RBI or government do in that? One of my relatives who works as an employee in a small Maharashtra town has put all her hard earned savings in a little known co-operative bank called Shahu Bank. Despite my best insistence, she doesn't want to lose faith in that stupid bank. What kind of idiocy is this!

Why don't people put their hard earned money in a solid nationalized bank like SBI, BOB, Axis or HDFC? Unlike co-operative banks, a nationalized bank has checks and balances, it is monitored by the RBI constantly for any problems.

PMC went bust because they lent 73% of all their depositor money to a problematic entity called HDIL. HDIL went bust and took along with others like PMC and Yes Bank (to some extent). Now, who is responsible to ensure that a bank doesn't lend 73% of their money to a single debtor but their debtor base should be varied and spread across different sectors? Had it been a nationalized bank, audits would be done by RBI and this would have been prevented.