New Delhi: The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, aims to protect the money of all depositors in state-run banks and there is no need to create any fear psychosis, Finance Minister Arun Jaitley said on Thursday.
He made this point while replying to a discussion in the Lok Sabha on the Supplementary Demand for Grants - Second Batch for 2017-18, introduced in the Lok Sabha in August.
"When the (FRDI) Bill comes before the joint committee, please discuss this. There is a 2011 G-20 commitment when UPA was in power and that was offtake of 2008 global crisis when the Lehman Brothers collapsed," he said.
Referring to the controversial "bail-in" clause in the bill, he said: "What do we do with that clause. The committee has wise people which will make some recommendations. We will consider that. We are open-minded. We are very clear and the level of protection the government would want would be much higher than level which existed till today."
A Resolution Corporation proposed in the bill is designed to prevent banks from going bankrupt. It would do this by "writing down of the liabilities". The draft bill empowers the Resolution Corporation to cancel the liability of a failing bank or convert the nature of the liability.
Jaitley also said that the Indian economy growing at 7-8 per cent is the new normal, inflation is under control and that the government has maintained a glide path on fiscal deficit.
The government had sought Parliament approval for additional expenditure of Rs 66,113 crore, which includes money for schemes to provide electricity connections to the poor and for payment of urea subsidies.
The proposals involving net cash outgo amounts to Rs 33,379.99 crore while the gross additional expenditure, matched by savings of the ministries or by enhanced receipts and ecoveries comes to Rs 32,732.05 crore.
The Lok Sabha later approved the Supplementary Demand for Grants towards additional expenditure to be made by various ministries and departments.