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In what is seen as a breather for depositors in the banking system, the Lok Sabha on Friday gave more time for the joint panel looking into the FRDI Bill to submit their report. The joint committee of Parliament can now submit its report up to the last day of the Monsoon Session 2018, according to the motion adopted by the Lok Sabha.
BJD Member Bhartruhari Mahtab moved this motion for adoption by the lower house on Friday. The joint panel was to earlier submit its report before the last day of the ongoing budget session.
An extension of time period would now mean that depositors need not fret about their monies getting used for any ‘bail in’ exercises anytime soon.
With the Financial Resolution & Deposit Insurance Bill (FRDI Bill) indicating that depositors’ monies could be used for “bail-in” of failing banks, the Bill had created widespread fear, apprehension and panic.
The apprehension is that deposits in banks would not be returned because of the “bail-in” clause in the Bill. The FRDI Bill was introduced in Parliament on the last day of the Monsoon session last year. This Bill is now before the joint committee of Parliament.
It was widely believed that Centre will, in the last Winter Session, take steps to enact the FRDI Bill, which provides the insolvency framework for financial firms, including banks and insurance entities.
Bank employee unions had cautioned the Centre against proceeding further with the enactment of FRDI Bill. They contended that the government should not go ahead with the FRDI Bill as it was wrongly timed and unwarranted in India.
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