Mamata writes to Arun Jaitley over 'draconian' FRDI Bill

Kolkata: Chief Minister Mamata Banerjee on Friday wrote a letter to Union Finance minister Arun Jaitley, stating that her views on the ill effects of the Financial Resolution and Deposit Insurance (FRDI) Bill, have been ratified by the fraudulent transactions worth $1.8 billion in Punjab National Bank (PNB).

"My conviction has now been vindicated by the recent incident of a massive banking fraud of over Rs 11,000 crore. Where then is the accountability of banks which are expected to protect the interest of common depositors? This development has raised doubt in the minds of the common people about the safety of their deposits in the banking system. I would therefore request the Government of India to take a lesson from this," read Banerjee's letter to the Finance minister.

It may be mentioned that while addressing a public meeting at Jhargram on Thursday, Banerjee had demanded a thorough time-bound investigation into the massive PNB fraud.

Banerjee had earlier written to Jaitley on December 16, raising her objections to the FRDI Bill and demanding its immediate withdrawal.

This is her second letter to the Finance Ministry with the same stand.

It may be mentioned that in response to her letter, Pon Radhakrishnan, Union minister of state for Finance and Shipping, had written on January 12 that the Bill is in the interest of the depositors and it will provide additional protection to them.

Radhakrishnan had argued that the bail-in has been proposed as one of the resolution tools in the event of financial distress in any financial institution.

Countering the Union minister's letter, Banerjee wrote, "The Bill proposes to introduce a draconian provision of bail-in, which has the potential of endangering the hard-earned deposits of the public. It is amply clear that the real intent of the Bill is to bail out one section of those with vested interests, who have siphoned off the loans given to them by the banking institutions, rather than protect the interest of the depositors."

Elaborating on the reasons for opposing the Bill, the Chief Minister said that the Bill can forcibly convert the deposits of common people into equity shares, can change the nature of deposits from one class to another, can impose a stay on depositors' right to withdraw deposits and can put a moratorium on payment of interest or repayment of deposits on maturity.

Earlier during the day, she tweeted: "Those who have Kisan Credit Cards and are entitled to loans, are being denied loans. And yet, some VIP bank customers are looting this country. The self-help groups, who run small businesses and other commoners, are deprived of loans. And yet, special people are being given thousands of crores of rupees. Why this fraud? Why this fraud?"