Assocham for removal of ‘bail-in’ clause in FRDI Bill

New Delhi, December 14 

Industry chamber Assocham today sought removal of the “bail-in” clause in the draft Financial Resolution and Deposit Insurance (FRDI) Bill.

It said the panic among the bank depositors has arisen largely due to “bail-in” provisions in the FRDI Bill, cautioning that the trust in the banking system runs the risk of being eroded if the clause is not done away with.

The draft Bill envisages a ‘Resolution Corporation’ which would prevent banks from going bankrupt by “writing down of the liabilities”, a phrase some have interpreted as a “bail in”.

“The government’s assurance notwithstanding, Sub-section 7 of Section 52 of the proposed law clearly says that the bail-in, to which depositors have strong objection to, shall not be applicable to deposits to the extent only covered by insurance,” said the chamber.

Assocham secretary general DS Rawat said in the Indian context, the concept of “bail-in” especially by depositors should be completely done away with and their monies in the banks have to be protected at any cost. — PTI