Panel on FRDI may seek time, chances of early passage dim
NEW DELHI: The parliamentary panel reviewing the contentious Financial Resolution and Deposit Insurance (FRDI) Bill is likely to seek more time to submit its report, officials of the panel said on Thursday.
The delay will dampen chances of the legislation’s early enactment. The first extension to the panel was granted in 2017.
At least three members from the panel said that decision to seek a second extension — till the end of the monsoon session — was taken in a meeting on Wednesday.
“It (FRDI Bill) has almost gone into cold storage. We don’t see any political will to push the financial reform bill. If the NDA was adamant on the bill, the report would have been given by now,” said a member of the panel.
Another member maintained that passing the legislation might be difficult for the BJP with general elections nearing. “The bill may hurt sentiments of millions...” the member said.
The bill, which aims to set up a resolution corporation (RC) for tackling crisis in financial firms, faced widespread opposition from different quarters over a bail-in clause in the draft.
Under the controversial clause, in case a bank fails, the money of the depositors can be used to bail it out, among other things. RBI governor Urjit Patel had stated last month that the country’s central bank is “not opposed to” the proposed law and also supported the guarantee of ₹1 lakh to depositors under the bail-in clause. He wanted to retain public sector banks under the purview of the bill.
The panel, in its last meeting, decided to meet more entities for deposition.
“Ministries like the economic affairs and legal affairs would be called for their views...” a third member said.