Yechury attacks government on ‘bail-in’ clause in FRDI Bill

New Delhi, Dec 1 (IANS) CPI-M on Friday attacked the Modi government on the proposed "bail-in" clause in a financial legisation and alleged it will be used to pay the written-off loans of rich defaulters "by stealing small savers' money".

CPI-M General Secretary Sitaram Yechury tweeted that the bail-in clause -- under which creditors and depositors absorb some of the losses if a financial institution fails -- would limit the amount of the "hard-earned" money depositors can get back from banks and will have serious consequences on those with bank savings.

"Government planning a 'bail-in', to limit amount of own hard earned money that depositors can get back from banks. This will have serious consequences on those with bank savings," Yechury said.

"After writing off over Rs 2 lakh crore for rich defaulters, with a 'bail-in' clause, small savers money will now be stolen (to) pay for it? The jumla was of Rs 15 lakh in each account, and now this," he added.

Asked about the proposed clause in the Financial Resolution and Deposit Insurance (FRDI) Bill, Finance Minister Arun Jaitley said the drafting process was still on and the bill had to go through the overall drafting process.

"Parliamentary Committee can offer a suggestion and thereafter it has to come back to the Cabinet. The Cabinet will put it in public domain and ask for suggestions as well. So I think a lot of corrections will take place," Jaitley told reporters here.

The CPI-M leader also attacked the government on its promise of doubling farmers' income by 2022 and said the GDP data showed the crisis in the farm sector.

"Instead of jumlas about doubling farmers' income by 2022, this government should tell us what steps it plans to take to ease farmers', their families' pain and give them their rightful due.

"Instead of backslapping, the government should admit the failure of jumlanomics," Yechury said.