Mamata writes to FM, seeks immediate withdrawal of FRDI Bill

West Bengal Chief Minister Mamata Banerjee has written to Union Finance Minister Arun Jaitley urging immediate withdrawal of the FRDI Bill to save people from "financial ruin".

In a letter to Jaitley, she said people will lose faith in the banking system if the Financial Resolution and Deposit Insurance (FRDI) Bill is not withdrawn.

The FRDI Bill will completely shatter the age-old faith and trust reposed by the people in the banking system of the country, she said in the letter.

The Centre is planning to table the bill during the Winter session of the Parliament.

"I will like to sincerely appeal to the Centre to desist from enacting this Draconian Law and withdraw the bill to ensure that the common people in the country are saved from financial ruin," she wrote.

Already, people are reeling under the adverse effects of demonetisation and hastily-introduced GST regime, she said.

Banerjee felt if the FRDI came into being, it would "forcibly" take away the hard-earned life savings of common people entrusted to the banks, for "bailing out one section of vested interests, who have siphoned off the loans given to them by the banks".

She said this is tantamount to cheating the depositors for no fault of theirs.

Citing examples, the chief minister said the bill would forcibly convert the deposits into equity shares of the bank, when it goes bankrupt.

It could change the nature of deposits from one class to another, thereby changing the interest rate or the tenure of the deposit.

It could also impose a stay on depositors' right to withdraw deposits before maturity.

It could also put a moratorium on payment of interest during repayment of deposits on maturity, she said.

To cover up the failures and allow one section of the vested interests to go unpunished, the Centre wants the common depositors to forgo their life-savings. This is really shocking and unacceptable, she said.