Govt unlikely to table FRDI Bill in budget session of parliament
The joint committee on the FRDI Bill has been granted an extension of time up to the last day of Budget Session 2018, speaker Sumitra Mahajan informed the Lok Sabha
New Delhi: The Financial Resolution and Deposit Insurance Bill, or FRDI Bill, may not be introduced in Parliament even during the budget session, as the joint committee looking into it got an extension for submitting its report.
Lok Sabha speaker Sumitra Mahajan informed the House that extension of time has been granted for the joint panel on the FRDI Bill “up to the last day of Budget Session, 2018”.
It also comes at a time when concerns have been raised in some quarters about certain provisions of the bill, including a so-called “bail-in clause”, which was introduced in the Lok Sabha in August this year. The joint committee on the FRDI Bill, 2017 have decided to seek extension of time up to the last day of Budget Session, 2018, as the report of the joint committee would not be ready for presentation by December 15.
The joint committee’s motion regarding extension of time could not be moved on December 15 “as the House was adjourned after making obituary references. Hence, I have on behalf of the House granted extension of time”, Mahajan said during Zero Hour.
The bill proposes to create a framework for overseeing financial institutions such as banks, insurance companies, non-banking financial services (NBFC) companies and stock exchanges in case of insolvency. The so-called “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.
The ‘Resolution Corporation’, proposed in the 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”.
It also empowers Resolution Corporation to cancel the liability of a failing bank or convert the nature of the liability. At present, all deposits up to Rs1 lakh are protected under the Deposit Insurance and Credit Guarantee Corporation Act that is sought to be repealed by the bill.
Last week, Finance minister Arun Jaitley said the government would fully protect public deposits in financial institutions and hinted at openness to changes in the bill.
- Change M&A norms to calculate spectrum dues: Trai
- Cracking India’s bankruptcy code
- RBI’s registry will help solve problem of credit shortage: iSpirt’s Sharad Sharma
- Fintech regulation at an inflection point: Shardul Amarchand’s Shilpa Mankar Ahluwalia
- Voice and AI biggest transformative tech, says EY’s Mahesh Makhija
Editor's Picks »
- Rahul Gandhi has seriously hurt image of Indian politician before world: Arun Jaitley
- HDFC Bank Q1 profit rises 18% at Rs4,601 crore
- Day after PM Modi hug, Rahul says only love, compassion can build a nation
- State-actors likely behind Singapore cyberattack: experts
- CAG puts spanner on GE’s diesel loco manufacturing unit in Bihar
- What ABB India’s performance in June quarter says about capex growth
- Bajaj Finance does well in Q1 even as competition hots up
- Kotak Mahindra Bank: The perils of being priced to perfection
- Higher cane price crushes hopes of sugar mills
- Market optimism before 2019 general election: History may not repeat itself