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Govt open to increase deposit insurance limit of Rs 100,000: Jaitley

The finance ministry also in a statement clarified 'certain misgivings' about the FRDI Bill

Press Trust of India  |  New Delhi 

Finance Minister Arun Jaitley
Finance Minister Arun Jaitley

Minister on Tuesday assured the that the government is considering putting in place a "much better" security measure for and is open to suggestions for raising the limit from Rs 100,000 currently.

The ministry also in a statement clarified "certain misgivings" about the FRDI Bill, saying the proposed legislation would not modify "adversely at all" the present protections available to

Replying to queries on the impact of the Financial Resolution and Deposit (FRDI) Bill on depositors, he said the bill is pending before the joint committee of both Houses and the government is awaiting the recommendations.

"As far as public sector banks in are concerned, there always has been, and will remain, an implicit guarantee of the government as far as supporting in those banks are concerned.

"As far as security to the is concerned, the government intends, after this bill, to have a security measure...much better than what arrangement existed prior to this bill," he told the

Chairman M Venkaiah Naidu also said, "There has been a lot of misunderstanding, disinformation and misinformation. It is good that the minister has clarified."

On the government guarantee on deposits, Jaitley said, "At the moment, security was up to level of 1 lakh rupees. The provisions of this bill give a flexibility and the intention of the government also is -- for which we are awaiting the recommendations of the Standing Committee -- that this amount should be raised. I am open to considering the suggestions in this regard."

The ministry statement said the FRDI provides only "additional protections" to the in a more transparent manner.

"Certain misgivings have been expressed in the media, especially social media, regarding the depositor protection in the context of 'bail-in' provisions of the These misgivings are entirely misplaced," the ministry said.

As per the ministry, 'bail-in' is only one of many resolution tools in the

"Bail-in provision may not be required to be used in case of any specific resolution. Most certainly, it will not be used in case of a public sector as such a contingency is not likely to arise," the ministry said.

"The similar protection would continue under the and the Resolution Corporation is empowered to increase the deposit amount," it said.

To another question in the if the Reserve Bank's mandate will shift from supervision, regulation to ensuring financial stability in country after passage of the bill, the minister said the RBI has several mandates and certainly there is a mandate "that financial stability in the country has to be maintained".

In reply to another question on misuse of Aadhar numbers, the minister said an aggrieved person can bring it to the notice of the UIDAI and if the authority finds that the complaint is genuine, then the Aadhaar-issuing body would take up the case.

"The number of complaints received so far with regard to frauds was 20 and the total amount involved in this is Rs 765,000. These are all cases which have been taken up by the concerned authorities," he told the members.

First Published: Tue, January 02 2018. 23:16 IST