New Delhi, Aug 7 (IANS) The government on Tuesday withdrew the FRDI bill from the Lok Sabha following concerns over the controversial ‘bail-in’ clause.
Minister of State for Finance Pon Radhakrishnan moved the proposal to withdraw the Financial Resolution and Deposit Insurance, Bill, 2017. The cabinet had earlier decided to withdraw the bill.
The bill has been slammed for some of its provisions, including a bail-in clause, under which a bank’s liabilities can be cancelled or modified to shore up its finances. There were concerns that it would put depositors’ money in banks at risk.
The bill was introduced in the Lok Sabha in August last year.
The bill sought to provide for the resolution of certain categories of financial service providers in distress and establishment of a Resolution Corporation for protection of consumers of specified service providers.
There was a feeling in the ruling coalition that the bill could lead to some political backlash amid concerns about the security of bank deposits.