New Delhi (NIK):
Communist Party of India has asked the Union government to ensure safety and security of bank deposits. According to a press statement CPI general secretaryry S Sudhakar Reddy has urged the government not to play with depositors’ money in banks. He said that Communist Party of India is shocked to learn that The Financial Resolution and Deposit Insurance Bill, 2017, or FRDI Bill, expected to be tabled in the upcoming Winter Session of Parliament if adopted will take away the depositors’ money in banks in order to bail out the banks hit by huge corporate defaults.
The FRDI Bill which seeks to create a framework for resolving bankruptcy in banks, insurance companies and other financial establishments proposes to establish a ‘Resolution Corporation’ to monitor financial firms, calculate stress and take “corrective actions” in case of a failure. The Bill empowers the corporation to take corrective actions such as merger or acquisition, transferring the assets, liabilities to another firm, or liquidation.
He further said that India never had such a resolution authority before. The Reserve Bank and the IRDAI are handling these functions for the banking and insurance sectors. The RBI, in the past, had asked PSU banks to take over stressed banks in order to protect the depositors and employees. The proposed Bill seeks closure of the Deposit Insurance and Credit Guarantee Corporation (DICGC), an RBI subsidiary, as the credit guarantee will be taken care of by the Resolution Corporation itself.
“The Corporation shall, in consultation with the appropriate regulator, specify the total amount payable by the Corporation with respect to any one depositor, as to his deposit insured under this Act, in the same capacity and in the same right,” the draft Bill states.
Until now it was mandatory for banks to pay a sum to the DICGC as insurance premium. Though the Bill proposes the banks to pay a sum to the Resolution Corporation, it neither specifies the insured amount nor the amount that will be paid to the depositor.
After the demonetisation and GST devastations, the present move will eat away whatever hard-earned money people have in the banks. Therefore the party urges the Modi government to desist from such heinous acts. Instead the government must ensure the safety and security of the savings of all depositors.
New Delhi (NIK):