No need for bail-in in 98 per cent cases, says Subhash Garg

New Delhi: Economic affairs secretary Subhash Chandra Garg on Wednesday said that there is no likelihood of bail-in for over 98 per cent of bank depositors which has been proposed in the Financial Resolution and Deposit Insurance Bill (FRDI), 2017.

He pointed out that 70 per cent of the deposits are in public sector banks. Mr Garg said that most of the remaining deposits are also  in well capitalised and sound private banks.

“Attempts to create scare regarding bail-in were totally unfounded. 70 per cent deposits are in PSBs. Most remaining deposits are in well capitalised and sound private banks. No likelihood of bail-in for over 98 per cent of depositors. Remaining also subject to bail in if the depositors consent,” tweeted Mr Garg.

There had been apprehensions in some sections that “bail-in” provision in the FRDI bill may result in people losing their hard earned savings to “bail-in” banks in case they go down.  

At present, deposits with banks are insured upto `1 lakh. Finance ministry has said that  similar protection would continue under the FRDI Bill and the Resolution Corporation is empowered to raise the deposit insurance amount.

FRDI Bill, introduced in the Lok Sabha on August 10, 2017, is presently under the consideration of the Joint Committee of the Parliament, which is consulting all the stakeholders on the provisions of the FRDI Bill.

The Joint Committee of Parliament has been asked to submit their report to the Parliament by the last day of the Budget Session, 2018.