Centre is pulling out FRDI Bill

Union Finance Minister Piyush Goyal has written to the Joint Parliamentary Committee studying the controversial Financial Resolution and Deposit Insurance (FRDI) Bill, stating his intention to withdraw it.

The Joint Parliamentary Committee has also reportedly given its approval for the withdrawal of the Bill, following which the government will inform Parliament.

“The government has already stated its intention to withdraw the Bill, and in this regard, the Finance Minister has written to the Parliamentary Committee,” the Finance Ministry spokesperson told The Hindu .

“Minister Piyush Goyal has written to the Chairman of the Committee saying that the government has decided to withdraw the bill... This is a victory of the opposition,” Trinamool Congress leader Saugata Ray said in the Lok Sabha.

While the government has not expressed an official reason why the Bill has been withdrawn, sources in the Finance Ministry say it wanted to avoid further controversy surrounding contentious provisions included in the Bill, such as the ‘bail-in’ clause.

The FRDI Bill was tabled in the Lok Sabha during the monsoon session last year and was then sent to the Joint Parliamentary Committee for legislative scrutiny. The bail-in clause would have allowed banks to access depositors’ money to re-finance ailing banks, if the situation required it. The government, however, has repeatedly tried to assure depositors that their money in public sector banks was safe and that it would not allow such banks to fail.

“It’s a good thing that they have withdrawn it,” a former senior banker with the State Bank of India told The Hindu . “If they were not going to touch depositors’ money, as they have said, then why have the bail-in clause in the first place?”


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Printable version | Jul 3, 2022 1:29:10 pm |