Remove 'bail-in' clause in FRDA Bill: Assocham


New Delhi, Dec 14 (IANS): Assocham on Thursday urged the government to remove a clause in the Financial Resolution and Deposit Insurance (FRDA) Bill that seeks to treat bank depositors as other creditors and shareholders for "bail-in".

Assocham Secretary General D.S. Rawat said that in the Indian context, the concept of bail-in -- especially by depositors -- should be completely done away with and their money in the banks has to be protected at all costs.

"Otherwise, the trust in the banking system runs the risk of being eroded and the savings by the households would find way into unproductive avenues like real estate, gold, jewellery and even in unorganized and informal financial markets run by unscrupulous people," said Rawat.

According to Assocham, panic has arisen among bank depositors largely due to "bail-in" clause in the Bill which was being tried for the first time in the Indian financial markets.

The industry body also sought the government's assurance to protect depositors' interest in case of a bank going down under. This should be clarified in the Bill, it said.

Rawat said middle class families, and especially pensioners and aged people, have no social security and thus bank deposits were the only financial security for their life-time savings.

"In any case, the rising cost of health, which is mostly available in the private sector, is hurting this class. Any move to copy the Western model of 'bail-in' must be avoided," he added.

 

  

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Comment on this article

  • wilfred almeida, Belle\Bangalore

    Thu, Dec 14 2017

    Bail In means bail out the bank by depositors were our money will vanish overnight. Govt using us as a Bakra for default business people who diverted their money to abroad. Now u cant keep your savings in bank. Now there is no option to keep money. Real Estate ,post office even bank will give very less returns. Only option is carefully investing in stock market if trend is good.

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Title: Remove 'bail-in' clause in FRDA Bill: Assocham



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