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 “allows 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 Arun Jaitley to not let this bill pass with the ‘bail-in’ provision.
Financial Resolution and Deposit Insurance (FRDI) Bill
- The FRDI bill, introduced in the Lok Sabha on August 11, 2017, is under consideration of the joint committee of Parliament. The panel is consulting all the stakeholders on the provisions of the legislation.
- According to the finance ministry, FRDI Bill, 2017 seeks to protect customers of financial service providers in times of financial distress.
- It also aims to inculcate discipline among financial service providers in the event of financial crises, by limiting the use of public money to bail out distressed entities.
- The Bill would help in maintaining financial stability in the economy by ensuring adequate preventive measures, while at the same time providing the necessary instruments for dealing with crisis events.
- The Bill aims to strengthen and streamline the current framework of deposit insurance for the benefit of retail depositors.
- Further, it seeks to decrease the time and costs involved in resolving distressed financial entities.
- Once enacted, a resolution corporation will be set up to strengthen the stability and resilience of the entities in the financial sector.
“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.
Meanwhile, the Finance Ministry said that the FRDI Bill is depositor friendly and provides more protection to them compared to existing provisions.