Under fire, govt to pull out controversial FRDI Bill

New Delhi, July 19

Fearing backlash in the next General Election amid public anxiety over fears that people’s hard-earned money may be used to bail out failed banks, the Union Government has finally decided to withdraw the controversial Financial Resolution and Deposit Insurance (FRDI) Bill 2017.

The proposed law, introduced in Lok Sabha in August 2017, was presently under the consideration of a joint House panel. It proposed to create a framework for overseeing financial institutions such as banks, insurance companies, non-banking financial companies and stock exchanges in case of insolvency.

The major controversy was about “bail in” provision, which, some analysts said, meant creditors and depositors would have to absorb losses in case of a bank failure. This raised concerns that common people may have to bail out banks. In December, Union Minister Arun Jaitley had said that the Centre was committed to protecting the interests of depositors in state-run banks. — TNS

Cabinet clears proposal

The FRDI Bill is likely to be withdrawn in monsoon session as a related proposal was cleared by the Cabinet at its meeting on Wednesday, said sources.