The Financial Resolution and Deposit Insurance (FRDI) bill which was introduced in the Lok Sabha in August has been deferred. The draft law is undergoing scrutiny by a joint parliamentary committee. The joint committee will now give its report in the Budget Session.
The FRDI bill is similar to the Insolvency and Bankruptcy Code, 2016. It is focused on companies in the financial sector. The bill proposes to create a framework for overseeing financial institutions such as banks, insurance companies, non-banking financial services (NBFC) companies and stock exchanges in case of insolvency.
In the last few days, the bill created controversy and panic amongst depositors. There were beliefs that the government was contemplating to liquidate the banks, and that depositors money would be lost in case the bill was passed as a law. 'FRDI Contemplating Increase In Deposit Insurance Cover'