FM Arun Jaitley today cautioned those creating fear psychosis over the much-debated FRDI Bill and said that the government is committed to protecting every depositor. Jaitley also said that Indian economy is growing at 7-8 per cent which is now the new normal. Commenting on inflation, he said, it is under control. “When the (FRDI) Bill comes before the joint committee please discuss this. There is 2011 G-20 commitment when UPA was in power and that was offtake of 2008 global crisis when the Lehman Brothers collapsed,” Jaitley said in a discussion on ‘Supplementary Demand for Grants – Second Batch for 2017-18’. He further added “What do we do with that clause (bail-in). The committee has wise people which will make some recommendations. We will consider that. We are open-minded. We are very clear and the level of protection the government would want would be much higher than level which existed till today.”
Earlier also the finance minister asked depositors to not pay heed to “fears being spread on the social media”. Taking to the micro-blogging site Twitter, Jaitley had posted this message: “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.”
According to Economic Affairs Secretary S.C. 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 also explained that the FRDI Bill, 2017 is actually meant to protect interests of depositors. “The Bill is far more depositor friendly than many other jurisdictions, which provide for statutory bail-in, where the consent of creditors or depositors is not required for bail-in,” a government statement said.
The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, introduced in the Lok Sabha in August this year, has a ‘bail-in’ clause, which some experts say brings potential harm to deposits in the form of savings accounts. The bill is currently undergoing scrutiny by a joint parliamentary committee.