New Delhi> The CPI M polit bureau termed the proposed Financial Resolution and Deposit Insurance Bill a blatant attack on crores of common depositors who save their life long earnings in bank deposits.
The resolution adopted by the PB at its meeting in Delhi on Saturday and Sunday says that ,It is clear that the Modi government is rushing through the Bill in the coming Winter session of parliament. This only helps the banks and the financial institutions to recoup their health at the expense of the depositors. While these banks have given humongous loans to the corporates which are not being returned, the consequent loss to the banks is sought to be made up through savings of crores of depositors.
This Bill falls in line with the recommendations of international finance capital which prescribes that in order to prevent any future global financial meltdown like that one happened in 2008 banks and financial institutions must ensure a process of “bail in” rather than “bail out”. The huge bail out packages given by various governments to banks and financial institutions to over come the global crisis of 2008 converted corporate insolvencies into sovereign insolvencies. This has crated a new crisis for global capitalism and this continues to plague the global economy.
In case a bank reaches a state of collapse this FRDI will have the power amongst others to exercise any one of the three measures to protect the bank. These are – sale to any other financial firm, including foreign corporates; the incorporation of a bridge institution (merger of banks as is currently being proposed by this BJP central government) or initiating a ‘bail in’ process.
If this comes into effect as law then the RBI’s mandate would shift from supervision, regulation and monetary policy to ensuring financial stability in the country. This would mean in fact that the interests of the ordinary depositors in the banks would be sacrificed in favour of protecting, both, the banks facing collapse and the corporates who have heavily borrowed from the banks.
The power to ensure that a failing bank can be recapitalized with depositors money and material without the depositors consent. There is no guarantee for protecting the depositors money.
The CPI M will oppose this legislation in parliament in the current form and will seek the support of all other parties to do the same in the interests of tens of crores of our people whose life long savings are jeopardised- warns the resolution.
