Financial Resolution And Deposit Insurance Bill

A proposal for a new law on bank resolution has already raised many troubling questions

The FRDI wants to grab the money of creditors and depositors above a limit, when banks or insurers are caught in a financial tsunami, for no fault of theirs

The system envisaged under the FRDI Bill would help improve the efficiency of capital allocation without harming consumers, and without risking the stability of financial firms

The FRDI Bill must specify the amount guaranteed

A JPC is examining Financial Resolution and Deposit Insurance Bill

Total value of insured deposits stood at Rs 28,26,400 crore at the end of March 2016

By providing a definitive legal framework to deal with the resolution of financial firms, the draft Financial Resolution and Deposit Insurance Bill takes a leap of sorts in Indian financial regulation. But some chinks in the armour need to be fixed