December 07, 2017

Rights of depositors will be protected: Govt on FRDI

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Arun Jaitley

Clearing the air on the proposed Financial Resolution and Deposit Insurance (FRDI) Bill, Union Finance Minister Arun Jaitley, in a tweet, said that the government will fully protect the interest of the financial institutions and depositors.

“The Financial Resolution and Deposit Insurance Bill, 2017 is pending before the Standing Committee. The objective of the government is to fully protect the interest of the financial institutions and depositors,” Jaitley tweeted.

Earlier, addressing the media, Economic Affairs Secretary SC Garg, said that the FRDI Bill proposes to protect existing rights of the depositors.

“There is no dilution thereof. Instead it enhances present protections in certain ways. Principal guarantee for PSU Banks’ depositors come from government ownership which also remains completely unaffected”, Garg said.

Terming the bill as anti-poor, the opposition parties said that the savings of people will be used to save the failing banks. They also expressed concern over the Section 52 of the proposed bill.

Section 52, Explanation II says, “The purpose of bail-in is to absorb the losses incurred, or reasonably expected to be incurred, by the covered service provider and to provide a measure of capital for it so as to enable it to carry on business for a reasonable period and maintain market confidence in it.”

In August 2017, the bill was tabled in the Lok Sabha, after which it was sent to the Joint Committee of Parliament; which is expected to submit its report in the upcoming winter session of the Parliament.

Please find attached the PDF for more information on FRDI Bill, 2017.

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