A link of ‘The Hindu’ article is being widely shared on social media with a claim that the government has come up with a new bill – the ‘Financial Resolution and Deposit Insurance (FRDI) Bill, 2017’, which has now been referred to a Joint Parliamentary Committee before getting it passed in the parliament. In the post, it is being claimed that there is a ‘bail-in’ provision in the Bill which empowers the bank to cancel a liability of the bank or change the form of an existing liability to another security. Let’s fact-check the claim made in the post.
Claim: The government has come up with a new bill – the ‘Financial Resolution and Deposit Insurance (FRDI) Bill, 2017’, which has now been referred to a Joint Parliamentary Committee before getting it passed in the parliament.
Fact: The ‘FRDI Bill, 2017’ mentioned in the post has already been withdrawn by the government back in 2018. So, there is no such bill now which is pending in the Parliament. In July 2020, the Government has clarified that it has not taken any decision to reintroduce the FRDI Bill. Also, the article given in the post has been published by ‘The Hindu’ back in 2017. Hence the claim made in the post is MISLEADING.
On clicking the given link in the post, it opens ‘The Hindu’ article published in November 2017. ‘The Hindu’ article talks about the ‘FRDI Bill, 2017’, with a focus on the ‘bail-in’ provision. In the article, it is mentioned that ‘the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 that was referred to a joint parliamentary committee this August (2017) after cabinet approval. This covers bankruptcy of businesses such as banks and insurance. Financial resolution includes solutions for banks facing ‘material’ or ‘imminent’ risk to viability depending on their capital and asset worth. This Bill also introduces the provision for a “bail-in”, whose purpose is to provide capital to absorb the losses of a bank and ensure its survival.’ The Bill as introduced in the Lok Sabha can be read here. There was a lot of debate regarding this Bill back in 2017 and 2018. Some of the tweets made by the ‘Ministry of Finance’ on this issue can be found here.
On checking the status of the Bill on the Lok Sabha website, it was found that the Bill has been withdrawn. So, there is no such bill (‘Financial Resolution and Deposit Insurance (FRDI) Bill, 2017’) now pending in the Parliament.
In February 2020, many news agencies reported an alleged statement made by the Finance Minister which read “We are working on the FRDI Bill, but not sure when it can get through the House”. But, in July 2020, it has been clarified by the ‘Ministry of Finance’ that ‘the Government has not taken any decision to reintroduce the FRDI Bill’. The tweets regarding this clarification can be found here and here.
To sum it up, the ‘FRDI Bill, 2017’ has been withdrawn by the government back in 2018. As of today, no decision has been taken by the government to reintroduce the FRDI Bill.
