Seeking Parliament’s approval for additional funds, Finance Minister Arun Jaitley told Lok Sabha on Thursday that the government was committed to protecting the interest of every depositor in the country and there was no need to create a “fear psychosis.” “When the Bill comes before the joint committee please discuss it,” said Mr. Jaitley, referring to the Financial Resolution and Deposit Insurance (FRDI) Bill, that is currently being examined by a Parliamentary panel.
He said it was an offshoot of a G-20 commitment made by the UPA in 2011 following the economic meltdown of 2008 and the collapse of the Lehman Brothers.
The bill, introduced in the Lok Sabha in August this year, has a ‘bail-in’ clause that experts claim can take away the rights of a depositor, in case a bank fails.
“What do we do with that clause? The committee has wise people which will make some recommendations. We are very clear that the level of protection would be much higher,” he said.
The FRDI Bill proposes to deal a Financial Resolution Corporation to deal with insolvent financial institutions such as banks, insurance companies, non-banking financial services (NBFC) companies.
Speaking on inflation, the Finance Minister said that it is under control and within the target fixed by the Monetary Committee Policy.
The Finance Minister said price rise of inflation was mainly caused by a temporary spike in vegetable prices post monsoon, firming up global crude oil prices and the increase in the purchasing power of government employees because of a payout of allowances recommended by the 7th pay commission.
“If you look at the figures from 2009 to 2014, you will find that inflation was 8.5 to 9 per cent. It even went up to double digit inflation like 12 per cent, the kind that one saw in the 1980s,”he said.
Mr. Jaitley added that the Indian economy growing at 7-8 per cent is the new normal and global institutions and rating agencies recognize India as a “sweet spot and one of the fastest growing economies.”
