Financial Resolution and Deposit Insurance Bill, 2017
FRDI Bill, 2017 seeks to protect customers of financial service providers in times of financial distress. It also aims to inculcate discipline among financial service providers in the event of financial crises, by limiting the use of public money to bail out distressed entities. The Bill also empowers a resolution body to bail-in the company. While a bail-out is the use of public funds to inject capital into an ailing company, a bail-in involves the use of depositors' funds to achieve those ends. This has caused a lot of concern among depositors who were worried they may lose their hard-earned money deposited with banks.
The FRDI Bill was introduced in August 2017 and was referred to a joint committee of the Parliament which is consulting all the stakeholders on the provisions of the FRDI Bill. The committee has been asked to submit its report to Parliament in this session.