Government withdraws FRDI Bill in Lok Sabha
08 August 2018
The government today withdrew the Financial Resolution and Deposit Insurance (FRDI Bill) amidst grave concerns over the "bail-in" clause in in the proposed bill.
The FRDI Bill was aimed at making an enabling law for creation of an independent resolution corporation to carry out speedy and efficient resolution of financial firms in distress, among others.
However, the provision of a bail-in clause generated widespread concerns that a debt-laden of failing bank could appropriate a customers deposit to to meet its debtors' claims.
The bill was introduced on 10 August 2017 in the House and then referred to the joint committee of parliament.
In July the government had said the bill would be withdrawn
A proposal to withdraw the bill was moved today by minister of state for finance Pon Radhakrishnan and was approved by the House.
Last week, the joint parliamentary committee Committee tabled its report and had agreed with the government's proposal to withdraw the bill.
Finance Minister Piyush Goyal had informed the committee about various reasons for deciding to withdraw the bill.
The stakeholders, including the public, have raised apprehensions relating to the provisions of the FRDI Bill like the use of bail-in instrument to resolve a failing bank and the adequacy of deposit insurance cover, Mr Goyal had told the panel.