If the government's proposal to convert the nature of deposits in banks even without the consent of the account holder, it may keep people away from banks. People from sub-urban and rural areas, who are not yet habituated to depositing in banks, will continue to stay away from the formal economy.

Using earned money of depositors to bail out a bank amounts to gross interference by the government. It violates the principles of corresponding rights and obligations and infringes upon the consumer rights of the people. The government would be doing a disservice to financial inclusion and depositors by seeking to have a complete control over people's hard earned money and by not permitting them to use their own money. The proposed law will directly impact savings in the country and people will adopt old methods of saving their money in pots and almariahs.

The bail-in provision could lead to further corruption as banks could become reckless in lending. This would erode people's trust in the banking system. While the demonetisation has failed and did not yielded fruitful results except suffering public, the new Bill will also repeat the similar results with more victims.

During the demonetisation period, the cap imposed on withdrawals did not show any impact on current accounts but saving account holders suffered. If the proposed Bill is passed, the government would be putting common man to great suffering, while the rich will go scot-free. Overall, the bail-in provision is totally unethical.

(The writer is a senior advocate and consumer activist)