FRDI Bill will protect the rights of depositors: FM

New Delhi: Finance minister Arun Jaitley Thursday said the proposed FRDI Bill protects the rights of depositors, denying reports to the contrary.

“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 said in a tweet. The government stands committed to this objective, he added.

According to economic affairs secretary SC Garg, 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.

The government tabled the Financial Resolution and Deposit Insurance Bill, 2017 in August in the Lok Sabha, which was referred to a Joint Committee of Parliament. The Bill seeks to deal with insolvency of financial service providers.

In a statement released to the press, the finance ministry has clarified the existing provisions of deposit protection guarantee will be maintained in the proposed FRDI Bill as well.

“The FRDI Bill does not propose in any way to limit the scope of powers for the government to extend financing and resolution support to banks, including public sector banks. Government’s implicit guarantee for public sector banks remains unaffected,” the statement read.

Meanwhile an online petition against the bail-in provision in the FRDI bill has got thousands of signatures.

An online petition on Change.org against the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, has gone viral on social media, seeking public support against what it terms as an attempt to “allow a government entity to use depositors money to save a bank on the verge of bankruptcy”.

The petition was started by a Mumbai-based individual, Shilpa Shree, with a single signature and has got over 40,000 signups within 24 hours, supporting her appeal to finance minister to not let this bill pass with the bail-in provision.

“Our hard earned money that we have saved for our children and for our future will be used to bail-in the banks,” the petitioner said.

“This bill gives power to a government entity to use depositors money to save a bank on the verge of bankruptcy. This government entity can declare the bank doesn’t owe you any money though you have deposited your hard earned money with it,” the petition said. (PTI)

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