Protection lags behind deposits for Indian savers

Housewife Sumathi Govindaraj has had an account at ICICI Bank Ltd, India's second-biggest lender, for four years. Last week she transferred her life savings of more than 200,000 rupees ($4,100) to state-run Indian Bank after-hearing rumors ICICI could be in trouble.

The mother-of-two from the southern city of Coimbatore thought her money would be safer at a government institution. She didn't know that deposit holders at all Indian banks get the same official guarantee: 100,000 rupees per account.

"I moved all my money thinking it is all safe; how is it that only 100,000 rupees is insured?" asked Govindaraj, 36. "The only option seems to be to put the money in a pot and bury it in the backyard."