Union Finance Minister Arun Jaitley has assured bank depositors that the government will fully protect public deposits in financial institutions even as he hinted at openness to changes in the proposed FRDI Bill.
This was after it was revealed that depositors had no rights to their own money under a provision in the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, first introduced in the Lok Sabha in August this year and currently undergoing scrutiny by a joint parliamentary committee.
Some experts have expressed their apprehensions that the so-called “bail-in” clause in the draft legislation will bring potential harm to deposits, in the form of savings accounts. Bail-in clause essentially means that the government will use the depositors’ savings to shore up the finances of struggling banks instead of using the tax-payers’ money for the same purpose.
Jaitley said the government’s massive Rs 2.11 lakh crore capital infusion plan in banks was to strengthen banks and there was no question of any lender failing.
If any such situation arises, the government will “fully protect” the deposits made by customers, the finance minister said here adding that “the government is very clear about it”.
Meanwhile, an online petition against the bail-in provision in the FRDI bill has got thousands of signatures.
An online petition on Change.org against the FRDI Bill has gone viral on social media, seeking public support against what it terms as an attempt to “allow a government entity to use depositors’ money to save a bank on the verge of bankruptcy”.
“Our hard earned money that we have saved for our children and for our future will be used to bail-in the banks,” the petitioner said.
“This bill gives power to a government entity to use depositors money to save a bank on the verge of bankruptcy.
This government entity can declare the bank doesn’t owe you any money though you have deposited your hard earned money with it,” the petition said.
(With PTI inputs)