Rumours are being spread about FRDI Bill: PM Modi

New Delhi, December 13, 2017: Prime Minister Narendra Modi
on Wednesday alleged that rumours were now being spread about the Financial
Regulation and Deposit Insurance (FRDI) Bill.
“The Union Government is working to strengthen the banking
system. The issue of NPAs is a legacy received by the current Government. But,
rumours are now being spread about the Financial Regulation and Deposit
Insurance Bill,” said Modi.
He said the Government was working to protect the interests
of the account holders, but rumours that were being spread are the exact
The Prime Minister was addressing at the inaugural session
of the 90th Annual General Meeting of FICCI in New Delhi.
He said organizations such as FICCI have a responsibility to
generate awareness about such issues and also has a role to play in making GST
more effective.   
The Financial Resolution and Deposit Insurance Bill, 2017
(FRDI Bill), introduced in the Lok Sabha on August 10, 2017, is presently under
the consideration of the Joint Committee of the Parliament. The Joint Committee
is consulting all the stakeholders on the provisions of the FRDI Bill. Certain
misgivings have been expressed in the media regarding “bail-in” provisions of
the FRDI Bill. The provisions contained in the FRDI Bill, as introduced in the
Parliament, do not modify present protections to the depositors adversely at
all. They provide rather additional protections to the depositors in a more
transparent manner.
The FRDI Bill is far more depositor friendly than many other
jurisdictions, which provide for statutory bail-in, where consent of creditors
/ depositors is not required for bail-in.
The FRDI Bill does not propose in any way to limit the scope
of powers for the Government to extend financing and resolution support to
banks, including Public Sector Banks. The Government’s implicit guarantee for
Public Sector Banks remains unaffected.
Indian Banks have adequate capital and are also under
prudent regulation and supervision to ensure safety and soundness, as well as
systemic stability. The existing laws ensure the integrity, security and safety
of the banking system. In India, all possible steps and policy measures are
taken to prevent the failure of banks and protection of interests of depositors
(e.g. issue of directions / prompt corrective action measures, capital adequacy
and prudential norms). The FRDI Bill will strengthen the system by adding a
comprehensive resolution regime that will help ensure that, in the rare event
of failure of a financial service provider, there is a system of quick, orderly
and efficient resolution in favour of depositors.

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