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Government has said that Financial Resolution and Deposit Insurance Bill (FRDI) 2017 provides only additional protections to the depositors in a more transparent manner. 

Finance Ministry, in a statement said, the bill does not modify present protections to the depositors adversely at all. It said, certain misgivings have been expressed in the media, especially social media, regarding the depositor protection in the context of bail-in provisions of the FRDI Bill. These misgivings are entirely misplaced. 

The Ministry said, currently deposits with banks are insured up to one lakh rupees. It said, the similar protection will continue under the FRDI Bill and the Resolution Corporation is empowered to increase the



deposit insurance amount. 

The uninsured depositors, that is, beyond one lakh rupees, of a banking company are treated on par with unsecured creditors under the present law and paid after preferential dues, including Government dues, in the event of its liquidation. 

Finance Ministry said, as per the provisions of the FRDI Bill, the claims of uninsured depositors in the case of liquidation of a bank will be higher than those of the unsecured creditors and government dues. 

Therefore, the rights of uninsured depositors will be better protected and such depositors will have an elevated status in the FRDI Bill compared to the existing legal arrangements.


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