Bank Union Threatens to go on Strike if FRDI Bill Not Amended

The Finance Ministry said that the FRDI Bill is far more depositor friendly than many other jurisdictions which provide for statutory bail-in, where the consent of creditors/depositors is not required for bail-in.

Written by: India.com Business Desk

Updated: December 13, 2017, 10:02 AM IST

Share

Share Article

• Facebook
• WhatsApp
• X
• Email
• Telegram
• Linkedin

https://www.india.com/business/bank-union-threatens-to-go-on-strike-if-frdi-bill-not-amended-2745966/ Copy

Bank Holidays in June 2022

New Delhi, December 13: The All India Bank Employees Association (AIBEA) on Tuesday threatened to go on strike if FRDI Bill is not amended to safeguard the interest of depositors. The government has however assured that it will protect rights of customers. The Finance Ministry in its statement said that 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 the consent of creditors/depositors is not required for bail-in.

The AIBEA said in a statement said, “Our banks deal with huge public money and total deposits in the banks today are more than Rs 106 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 Financial Resolution and Deposit Insurance (FRDI) Bill 2017 with ‘bail-in’ clause are created panic amongst the people about 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 (with the Bill),” it said.

Earlier this week, the government has 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.

The government had tabled the FRDI Bill, 2017, in August in the Lok Sabha, which was referred to a Joint Committee of Parliament. It is currently undergoing scrutiny by a joint committee of Parliament. The “bail-in” clause in the draft legislation has been commented upon by experts as of bringing potential harm to deposits, in the form of savings accounts.