The government has decided to withdraw Financial Resolution and Deposit Insurance (FRDI) Bill following apprehensions expressed by the public with regard to the "bail-in" clause to resolve a failing bank and insurance cover on bank deposits, Finance Minister Piyush Goyal told a Parliamentary Committee.
The FRDI Bill was introduced in Lok Sabha on August 10 last year.
Here are more details.
Resolution of these issues would require comprehensive examination: Goyal
"Resolution of these issues would require a comprehensive examination and reconsideration. It is, therefore, appropriate that the bill may be withdrawn," Goyal had informed the Joint Committee, which tabled its report on the controversial bill today in Parliament.
What is the benefit of FRDI Bill?
The Joint Committee, headed by Bhupender Yadav, agreed with the proposal of the government to withdraw the bill.
The FRDI Bill sought to make an enabling law for the creation of an independent Resolution Corporation to carry out the speedy and efficient resolution of financial firms in distress, providing deposit insurance to consumers of certain categories and monitoring of the systemically important financial institutions.
Committee seeks views of several stakeholders including RBI
The committee sought views of several stakeholders, including RBI and industry bodies. While briefing the panel, RBI Governor Urjit Patel expressed concerns about various provisions of the bill related to criteria for risk classification, information sharing between regulators, and Resolution Corporation among others.