On Wednesday, Finance Minister Arun Jaitley clarified the proposed Financial Resolution and Deposit Insurance Bill (FRDI) protects the rights of the depositors. Many reports have claimed the FRDI fails to protect the rights of the depositors.
He said in a tweet, “The Financial Resolution and Deposit Insurance Bill, 2017 is pending before the Standing Committee. The objective of the Government is to fully protect the interest of the financial institutions and depositors.” Jaitley further stated the Government still stands committed to this objective.
But according to the Economic Affairs Secretary S. C. Garg, the proposed bill protects the existing rights of the depositors. Garg was quoted saying, “There is no dilution thereof. Instead, it enhances present protections in certain ways. Principal guarantee for PSU (Public Sector Undertaking) Banks depositors come from government ownership which also remains completely unaffected.”
In August this year, the Government proposed the FRDI at the Lok Sabha. The bill was later referred to a Joint Committee of Parliament. The bill aims at dealing with the insolvency of financial service providers.