The Centre has been battling public concerns ever since the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, was tabled in Parliament in August.
Finance Minister Arun Jaitley was seen trying to alleviate fears among citizens and public forums and ensured transparency. However, looks like these efforts have not been successful as the All India Bank Employees Association (AIBEA) is the latest to join the resistance bandwagon. The association made it clear that it is planning to launch a strike if the Centre proceeds with the proposed legislation.
In a statement issued late on Monday, the AIBEA said: "The bill has created widespread fear, apprehension and panic amongst the depositors that the government is contemplating to liquidate the banks and the deposits of the banks will not be returned because of the bail-in clause of the bill."
According to AIBEA, the bill provides for setting up a new authority Financial Resolution Corporation (FRC) that will deal with liquidation and resolution of banks, insurance and other financial institutions.
"This FRC will supersede the powers of RBI (Reserve Bank of India) and other agencies dealing with the problem at present. Deposit Insurance Corporation guarantees deposits upto Rs 1 lakh per customer. This will be closed down and the FRC will decide the amount now," AIBEA said, according to news agency IANS.
In addition, the FRC has power to liquidate any bank and permit to use the depositors' money to bail-in a bank. This provision is creating doubt and panic in the minds of every one, the statement said.
According to AIBEA, at a time when people are already worried about their money in the banks due the huge bad loans and consequent write off, loss of revenue, losses being incurred by banks, the government instead of assuring the people about safety has chosen to bring this FRDI Bill which deals with possible liquidation of banks.
The bank union spoke of stringent measures to recover the huge bad loans from big corporates and other defaulters.
The AIBEA said the question of bail-in does not arise in Indian situation as banks under liquidation are general merged with stronger banks.
