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‘FRDI Bill will take away people’s bank deposits’: Mamata writes to Jaitley for immediate withdrawal

NEW DELHI: Trinamool Congress (TMC) chief and West Bengal Chief Minister Mamata Banerjee has written to Union Finance Minister Arun Jaitley urging immediate withdrawal of the Financial Resolution and Deposit Insurance (FRDI Bill) saying, it will take away people’s bank deposits.

 Arun Jaitley

Terming the FRDI Bill as “draconian”, the Trinamool Congress (TMC) has said it will oppose it tooth and nail in the Parliament and launch a massive campaign against it in the state.

“People will lose faith in the banking system if the Financial Resolution and Deposit Insurance (FRDI) Bill is not withdrawn.  The FRDI Bill will completely shatter the age-old faith and trust reposed by the people in the banking system of the country,” Mamata Banerjee said in a letter to Jaitley, reported News18.com.

A report said that Banerjee felt if the FRDI came into being, it would ‘forcibly’ take away the hard-earned life savings of common people entrusted to the banks, for ‘bailing out one section of vested interests, who have siphoned off the loans given to them by the banks”.

Prime Minister Narendra Modi had said that the government is working to protect the interest of bank customers and their deposits, in a bid to scotch rumours regarding the proposed Bill.

Industry body Assocham has also said that experts felt the “bail-in” clause in the draft FRDI Bill, 2017 can potentially harm deposits in savings accounts.

The FRDI Bill proposes to create a framework for overseeing financial institutions such as banks, insurance companies, non-banking financial services companies and stock exchanges in case of insolvency.

The Resolution Corporation, proposed in the draft bill, would look after the process and prevent the banks from going bankrupt. It would do this by “writing down of the liabilities”, a phrase some have interpreted as a “bail in”.

The draft bill empowers Resolution Corporation to cancel the liability of a failing bank or convert the nature of the liability.