The All India Bank Employees Association (AIBEA) is contemplating a strike action against the “unwarranted” FRDI Bill, if the government proceeds further, its General Secretary CH Venkatachalam said.
The government should not go ahead with the Financial Resolution and Deposit Insurance (FRDI) Bill as it is wrongly timed and unwarranted in India, Venkatachalam said.
The government should look at strengthening the banks and not talk of liquidation rules, he told BusinessLine .
It is widely believed that Centre will in the ensuing Winter Session take steps to enact the FRDI Bill, which provides the insolvency framework for financial firms, including banks and insurance entities.
With the FRDI Bill indicating that depositors’ monies could be used for “bail-in” of failing banks, the Bill has created widespread fear, apprehension and panic amongst depositors.
The apprehension is that deposits in banks would not be returned because of the “bail-in” clause in the Bill, according to Venkatachalam.
The FRDI Bill was introduced in Parliament on the last day of the previous session. This Bill is now before the Joint Committee of Parliament.
This Bill provides for the setting up of a new authority, Financial Resolution Corporation, which will deal with liquidation and resolution of banks, insurance and other financial institutions.