Ficci event: Your money is safe in banks, says PM Modi on FRDI Bill

Prime Minister Narendra Modi on Wednesday sought to allay the fears of bank account holders, saying their deposits in banks will be safe and their interests would not be harmed in any way.

Addressing the Ficci annual general meeting, he said rumours were being spread by some sections about provisions of the proposed Financial Regulation and Deposit Insurance (FRDI) Bill under which the depositors would suffer.

"The government is trying to strengthen the banking system by policy initiatives on a daily basis. But on social media rumours are being spread about the FRDI Bill, which is completely opposite to the reality. We are trying to protect the depositors interest and the banks as well," Modi said.

He was apparently referring to the raging controversy over a bail-in provision in the FRDI Bill under which banks will be allowed to forfeit major portion of deposits of account holders in case of crisis in the financial institution.

The Prime Minister said the UPA government had completely spoilt the banking system of the country. He said the biggest liability passed on by the previous government was the non-performing assets (NPA).

Modi said the last government had put pressure on banks and forced them to lend to influential people, which further led to NPAs. "Commonwealth scam, 2G scam and Coal scam, and the biggest scam - the banking scam - all happened during UPA regime."

He said the government is working to create a system that is transparent and sensitive.

Talking about the Goods and Services Tax (GST), Modi said the government's effort is to ensure that maximum businesses register for GST. "The more formal the system becomes, the more it will benefit the poor. It will enable easier availability of credit from the banks, and reduce cost of logistics, thereby enhancing competitiveness of businesses."

Modi recalled that around the time of Ficci's founding in 1927, Indian industry had united against the Simon Commission that was constituted by the then British government. He said that Indian industry had joined all other sections of Indian society, in national interest, at that time.

He said a "similar atmosphere" exists today when people of the country are coming forward to fulfil their responsibilities towards the nation. Modi said the hopes and aspirations of people are to rid the country of internal problems like corruption, and black money.