Finance Minister Arun Jaitley on Wednesday said the proposed FRDI Bill protects the rights of depositors, denying reports to the contrary. "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," he said in a tweet.
The government stands committed to this objective, he added. According to Economic Affairs Secretary S C Garg, FRDI Bill proposes to protect existing rights of the depositors. "There is no dilution thereof. Instead it enhances present protections in certain ways. Principal guarantee for PSU Banks' depositors come from government ownership which also remains completely unaffected," Garg said. The government tabled the Financial Resolution and Deposit Insurance Bill, 2017 in August in the Lok Sabha, which was referred to a Joint Committee of Parliament.
The bill seeks to deal with insolvency of financial service providers. The bill provides for establishment of a resolution corporation with powers relating to transfer of assets to a healthy financial firm, merger or amalgamation, liquidation to be initiated by an order of the National Company Law Tribunal. It can also designate certain financial providers as systematically important financial institutions, the failure of which may disrupt the entire financial system, said the 'Statement of Objects and Reasons' of the bill.