FRDI Bill, if passed by the Parliament, has the potential to harm our deposits, the banking system and the economy of this country.
If your bank is about to fail due to the weight of bad loans, the bail-in provision will convert your deposit (beyond the insured amount) into equity and you can be made shareholders with/ without your consent.
Insured amount is not defined in the Bill. The current one lakh will be nullified by the passing of this Bill.
If your bank is small and has more NPA, the Bill still has the right to selling its assets, handing it over to a temporary institution for a year (bridge service provider), merging it with another bank or by liquidating it.
This Bill rests this authority to the Resolution Corporation (RC) which will decide the fate of your deposits. If your bank is in imminent or critical risk as per Bill’s definition, even RBI will have no power over RC.
In the name of protecting the tax payer’s money the government is asking those very people to pay for the failure of big corporate companies not able to pay their loans.
The common people of this country had to suffer through demonetisation, GST, growing unemployment and underemployment while the rich and powerful enjoy tax cuts and write-offs of their loans. This Bill blatantly asks the poor to pay for the mistakes of the rich and powerful.
Read more about the Bill and its impacts click here