Bank union threatens strike if FRDI Bill is not revamped

The All India Bank Employees Association (AIBEA) on Tuesday threatened to go on strike if the Financial Resolution and Deposit Insurance Bill, 2017 (FRDI Bill) is not amended to safeguard the interest of depositors.

The AIBEA said in a statement, ''Our banks deal with huge public money and total deposits in the banks today are more than Rs106 lakh crore. Unlike the American and other Western banks which are run with shareholders and investors' money, banks in India are run with people's hard-earned savings kept as deposits, and hence the safety of people's money should be the top priority.''

The AIBEA is of the opinion that the FRDI Bill with a 'bail-in' clause is creating panic among the people about the safety of their deposits in banks.

''AIBEA has already appeared before the Joint Parliamentary Committee and urged upon them to reject the Bill. It is contemplating a strike action against this unwarranted FRDI Bill, if the government proceeds further,'' it said.

 ''The government should look at strengthening the banks and not talk of liquidation rules,'' AIBEA general secretary C H Venkatachalam said.

The apprehension is that deposits in banks would not be returned because of the ''bail-in'' clause in the Bill, according to Venkatachalam.

The FRDI Bill was introduced in Parliament on the last day of the previous session. It is now before the Joint Committee of Parliament.

The bill provides for the setting up of a new authority, Financial Resolution Corporation, which will deal with liquidation and resolution of banks, insurance and other financial institutions.

With the FRDI Bill indicating that depositors' monies could be used for ''bail-in'' of failing banks, the Bill has created widespread fear, apprehension and panic amongst depositors.

Earlier this week, the government assured that the FRDI Bill will strengthen the system by adding a comprehensive resolution regime that will help ensure that, in the rare event of failure of a financial service provider, there is a system of quick, orderly and efficient resolution in favour of depositors. But this argument has found few takers (See: Jaitley seeks to soothe depositors amid protests over FRDI Bill).