New Delhi [India]: The Financial Resolution and Deposit Insurance Bill, 2017 (FRDI Bill) is far more depositor friendly than many other jurisdictions which provide for statutory bail-in, where consent of creditors / depositors is not required for bail-in, the Ministry of Finance said on Thursday.
The ministry in its official statement said that certain misgivings have been expressed in the media regarding “bail-in” provisions of the FRDI Bill and it clarified that the provisions of the bill are in line with the objective of the government to fully protect the interest of the financial institutions and the depositors.
“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,” it added.
The provisions contained in the FRDI Bill, as introduced in the Parliament, do not modify present protections to the depositors adversely.
“The FRDI Bill does not propose in any way to limit the scope of powers for the Government to extend financing and resolution support to banks, including Public Sector Banks. The Government’s implicit guarantee for Public Sector Banks remains unaffected,” the Ministry of Finance said.
FRDI bill was introduced in the Lok Sabha on August 10, 2017 is presently under the consideration of the Joint Committee of the Parliament. The Joint Committee is consulting all the stakeholders on the provisions of the FRDI Bill.