Union cabinet headed by the PM Narendra Modi has passed the Financial Resolution and Deposit Insurance (FRDI) Bill on 14-June-2107. This is not just another law.
Thie FRDI Bill, if passed by the Parliament.Then the following things will happen.
1. DICGC will be abolished
2. A Corporate body called 'Resolution Corporation' will replace DICGC
3. Salary and Remuneration of Bankers will be reduced as per Sec 44 (3-c)
4. On Merger or Amalgamation of Banks, Workmen employees will be sent home as per Sec 49 (i) and (j).
5. The Corporation Board can list any bank as unviable and Liquidate it. (Chapter 14)
6. All the Employees will be sent home without any notice on Liquidation of banks.(Chapter 14)
7. No Court can question the action of liquidation and the Board will become all powerful. Sec 64
8. Depositors will not get 1 Lac as assured by DICGC. But only a part payment of the minimum amount decided by the Board.
9. Assets of the Banks can be sold to any person at the discretion of the Board. Sec (65)
I have mentioned just 9 points but the bill run for 147 pages. From this anyone can imagine the draconian nature of the Law. After presidential election all the process will be smoothly executed.
Comrades, Dont you understand your energy is diverted towards Wage Revision Talks with a toothless body called IBA?
Please dont waste your energy with Bipartite now.
Put the Condition " Scrap the FDRI Bill and Insolvency Bill" before any talks.
Immediately form a legal team of UFBU to study these bills.
Send the Memorandum to all the Members of Parliament.(Official email List I can provide)
If needed go for All India Strike.
Any new bill/policy introduced by this Govt against Bankers should be studied, discussed and opposed strongly by Trade Unions but unfortunately the support rendered by the members and leaders to any efforts made by handful of leaders is also not to the mark. But on the other hand the Govt, RBI and BBB are studying the pulse and feeble response of majority of Leaders and Unions to such policies/announcements and moving even harder than before.
Comrades, If any of you feel that it is not possible to stop this bill then kindly give the responsibility of leadership to someone who is positive and vibrant enough to work hard to save our nation.
We are in 'Do or Die' situation now.
Please 'DO' ....We cadres are ready...
Im attaching a Press statement made by Com.C.P.Krishnan, GS, BEFI TN against these bills.
Press Statement issued by T.Thamilarasu and C P Krishnan opposing FRDI Bill, 2017
On 14th June 2017, “The Cabinet, chaired by Prime Minister NarendraModi, approved the proposal to introduce the Financial Resolution and Deposit Insurance (FRDI) Bill, 2017. The bill will pave the way for set up of Financial Resolution Corporation to deal with the bankruptcy of the Banks, Insurance Companies and Financial Entities” according to the media reports.
Accordingly the Public Sector Banks (PSBs) including State Bank of India (SBI), Insurance Companies including Life Insurance Corporation of India(LIC), Regional Rural Banks (RRBs) and Co-operative Banks face the threat of closure/liquidation, if they are classified as having material risk to viabilityin the judgement of theBoard of the Resolution Corporation.Bank Employees Federation of India strongly deplores the move of the Central Government to introduce this bill and urges the Government to withdraw its proposal.
It is to be reiterated that these public sector financial institutions have been created to serve the ordinary masses besides marginalized and under-privileged sections of the people.
Out of the total Non-Performing Assets (NPAs) 88.4% is the creation of the large borrowers with the loan exposure of Rs.5 crores and above. On top of it, 12 large borrowers constitute 25% of the NPAs.
According to the Economic Times dated 26.06.2017, RBI told banks to set aside at least 50% of the loan amount as likely losses for all cases referred to the insolvency process; the regulator also said that provisioning should be 100% for those cases that don’t get resolved in the initial mandatory period for loan restructuring and instead are forced into liquidation.
It is now clear how ‘efficiently’ the law of Insolvency and Bankruptcy Code (IBC), 2016 would be utilized. If Banks have to make 50% or 100% provision, then what is the use of this law?
The present BJP Government has no political will to recover the NPAs from the corporates. Hence it attempts to show the performance of the PSBs in poor light and then liquidate them through the new bill cleared by the Union Cabinet on 14th June.
56 RRBs spread over 600 districts with around 23000 branches have been rendering excellent service to the rural people by lending almost 80% of the total advances to the poor and marginalized. Further there is a demand from the Unions/Associations to strengthen RRBs by providing adequate man power and improving their infra-structure. Despite poor support from the Government, only four RRBs incur loss. That may be cited as an excuse for the Government to wind them up.
The co-operative institutions which have been extending real service to the common man, have been weakened to some extentas 370 Central Co-operative Banks with around 14000 branches and 93000 Primary Agriculture Co-operative Societies were kept away from the note-exchange exercise during demonetization period. The losses incurred by these institutions due to farm loan waiver announced by the Government were not fully reimbursed by it. This hasfurther weakened their financial stability. These institutions which were exempted from payment of Income Tax are forced to pay the same through a change of law made about a decade ago. Due to these faulty policies, some of the co-operative institutions suffer losses for some period.The same may be attributed as their inefficiency and quoted as the reason for liquidating them.
Despite stiff competition posed by the private insurers, the Public Sector LIC stands number one in terms of market share and service in the Life Insurance sector with no competitor anywhere near LIC. The four Public Sector Non-Life insurance companies continue their dominant position with regard to market share and service to the common man in spite of unethical competition by the Private Insurance Companies imposeddue to the defective policy of the Government. There cannot be any reason for their closure even remotely.
In this backdrop, it is incomprehensible why such a bill is attempted to be brought. The move of the Government lacks any logic or reason. This is yet another deliberate attempt to serve the Corporates by encouraging more and more private banks in the name of small banks or payment banks and keeping our country’s door wide open for Foreign Banks.
BEFI strongly condemns the move of the Central Government and calls upon all the Trade Unions and democratic forces to resist the move of the Government to close down Public Sector Financial Institutions and defeat the same. BEFI also appeals to all the patriotic minded Members of the Parliament to oppose the Bill, when introduced in the Parliament.
(C P KRISHNAN)