Bank unions approach FM for FRDI Bill withdrawal

New Delhi: Bank unions have requested Finance Minister Arun Jaitley to withdraw the FRDI Bill as it proposes to empower authorities with sweeping powers to wind up public sector banks and insurance companies.

Already, there are many rules and legislations in place under the existing Acts that deal with winding up of financial institutions, United Forum of Bank Unions (UFBU) said in its representation to the finance minister.

The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017, was tabled in the Lok Sabha last month. It was referred to the 30-member committee comprising members of both the Lok Sabha and the Rajya Sabha.

"The objective of this Bill is obviously to heavily empower the new authority with sweeping powers to dismantle and erase public sector financial institutions like banks and insurance companies and hence, it is apparently draconian. We demand the withdrawal of this Bill," it said.

UFBU is an umbrella organisation of all banks unions.

In a representation submitted last week, they also demanded declaration of wilful default of bank loans as criminal offence.

The RBI Act should be amended to provide for publication of the names of these defaulters, suggested All India Bank Employees' Association (AIBEA) General Secretary C H Venkatchalam.

"We also requested the finance minister that recommendations of the Parliamentary Committee be accepted and implemented to ensure better recovery of bad loans," he added.

Ravinder Gupta, Joint General Secretary of All India Bank Officers Confederation (AIBOC), another affiliate, said there was also demand for reimbursement of cost to banks during the demonetisation.

He felt that the banks should restore the reduction in interest rate on savings accounts.

"Common public should not be harassed by more service charges because of the loss of revenue due to loan default by big companies," he said.

SBI and many other banks have reduced rate of interest of savings deposits.