NEW DELHI: The government on Tuesday assured bank depositors that their money will remain insured under the Financial Resolution and Deposit Insurance (FRDI) billand the resolution corporation can raise the deposit insurance amount.
“The existing provision of insurance for bank deposits up to Rs 1lakh will continue under the Financial Resolution and Deposit Insurance (FRDI) Bill and the resolution corporation is empowered to raise the deposit insurance amount,” the finance ministry said on Tuesday, assuring that the legislation provides additional protection to depositors in a more transparent manner.
TOI had reported on December 9 that the government is considering to raise the protection on bank deposits beyond the Rs 1lakh after a controversy erupted over provision of the legislation. The government has said that “needless controversy” was being created and had assured depositors about the safety of their money.
“Depositors’ existing protections will be enhanced. Bailin will be only sparingly used. Public sector banks will effectively be not subject to bail-in provisions. Depositors need not have any apprehension,” economic affairs secretary Subhash Chandra Garg said on Twitter. Referring to the safeguards in the event of a bailin, the bill makes it clear that insured deposits of banks cannot be used in case of bail-in.
Source by indiatimes..