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Do Bank Depositors need to Panic under FRDI Bill 2017

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Do Bank Depositors need to Panic under FRDI Bill 2017
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Financial Resolution and Deposit Insurance Bill, 2017 is meant to protect interests of depositors. Presently under Deposit Insurance and Credit Guarantee Corporation, Insurance of Deposits per customer in each Bank are insured up to Rs.100000-00 only. In my earlier article which was published in the year 2012 and updated from time to time I had alerted the public in general that Insurance is no substitute for Social Security and Government must pass a regulatory bill that all type of Insurances should be unconditional as a common man can go into the minute details of riders being put by the Insurance Companies to cheat the unaware insurers. Rumours are being spread by the vested interests and Political Parties to mislead the public in general so that they lose confidence in the Indian Banking System.

Facts about Indian Banking System and FRDI Bill 2017:

Historically, in the Indian Banking System, no depositor was put to loss even when any Private Sector Bank was in difficulty. For example, take the case of erstwhile New Bank of India which was a Private Bank until 19th July 1980 when it was nationalized. It was in RED in the year 1993 when it was merged with Punjab National Bank, one of the Top PSU Banks in India after State Bank of India. Similarly, all the nationalized Banks are fully owned Government of India Undertakings and if at all we need to keep vigil, we need to ensure that vested political interests do not allow the Government holdings in such Banks to go below 51% in such a way that they are gifted away to Private Business Houses like Tatas, Ambanis, Adanis by any party in Power – may it be BJP or Congress. Till the Government stake is not reduced to less than 51%, there is no cause of worry for the public and the Indian Banking System is one of the most robust Banking Systems in the world but for the only factor that past sound Policies of the Indian Banking System were diluted during the Congress Regime under Prime Minister Manmohan Singh just to benefit the big business houses in a clandestine manner by reducing the interest rates on Credits by lowering the rate on Savings and Fixed Deposits is such a way that the net of Rate of Interest on Deposits and Inflation Rate yieleded negative ruturns to the depositors. The Present BJP Government under Hon’ble Prime Minister Narinder Bhai Modi will do justice to the people by restoring the old SLR and CRR rates as in the Past. It was due to sound checks and systems of maintaining high SLR that Indian Banking Systems stood by the storms when more than 38 American Banks vanished in 2007-2008.

All the Nationalized Banks have protected the interest of all the depositors in the past and hope they do so in the future also. Your deposit with all the Nationalised Banks in India is safe as all the Nationalised Banks are a Public Sector Bank with Govt. of India ownership. Rumours are being floated by miscreants and vested interest persons through Social Media and Watsapp messages and none of them take ownership for the rumours. It is only to create confusion among the public and create mistrust on the Honest Intentions of Present Government of India under the dynamic leadership of Hon’ble PM Narender Bhai Modi, who is working round the clock to undo the damage done to the Indian Economy from years 1991 t0 2014 in the name of Economic Reforms just to please the IMF and the World Bank who dictated the Indian Economic Decisions by successive Congress Governments. Please do not believe them. The Financial Resolution and Deposit Insurance Bill, 2017 (FRDI Bill), introduced in the Lok Sabha on August 11, 2017, is under consideration of the Joint Committee of the Parliament. The Joint Committee is consulting all the stakeholders on the provisions of the FRDI Bill. Certain misgivings have been expressed in the media on one clause, without highlighting the total protection. The provisions contained in the FRDI Bill, as introduced in the Parliament, do not modify present protection available to the depositors adversely at all. They, on the other hand, provide additional protections to the depositors in a more transparent manner. The FRDI Bill does not propose in any way to limit the scope of powers for the Government to extend financing and resolution support to Banks, including Public Sector Banks. Government’s implicit guarantee for Public Sector Banks remains unaffected. These
assurances have come from none other than Honorable Prime Minister of India and Honorable Finance Minister of India. Bank’s in India have adequate capital and are also under prudent regulation and
supervision to ensure safety and soundness, as well as systemic stability.


However, the Public is advised to remain alert about the Private Sector Banks like ICICI Bank, HDFC Bank, Axis Bank, Kotak Bank, Other Banks and Banking Financial Companies. The Public is also advised to exercise caution with Payment Banks being launched by Network Providers like Airtel, Vodafone, Reliance etc as they are following unethical practices. All the Mobile Network Operators have cheated the public in general while linking the SIM Cards with aadhar Numbers of the public and without the knowledge of the SIM owners, they got the consent of the public without their knowledge to open their Bank Accounts with them. Only recently, the UIDAI has penalized heavily the Airtel Payment Bank for cheating its customers and they have already deposited the first installment of the penalty of Rs.2.5 Crore with UIDAI. I had warned well in advance to the Government of India about the possible malpractices by network providers in my article titled as “Aadhaar Verified Sims may Fetch Hefty Premiums“. But the Lobby of Network Providers is so strong that the Government has not the guts to limit issuance of not more than one SIM to every verified living (Not Dead) Aadhar Card, Holder and that too which is a Major above the age of 18 years.

Ashok Goyal, Retd Chief Manager PNB, and Renowned CIBIL Consultant.


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