Labour ministry raises concerns over bail-in clause in FRDI Bill

Officials say move may impact medical benefits under ESIC; clause says depositors' money can be used to infuse capital in ailing financial institutions

The Union labour and employment ministry has raised concerns about the ‘bail-in’ clause — under which bank deposits can be used for helping failing public sector banks (PSBs) to stay afloat — in the Financial Resolution and Deposit Insurance (FRDI) Bill.

This is perhaps the first time the clause has drawn flak from within the government, which is facing criticism from other quarters as well. 

The ministry has represented that a substantial chunk of money kept in fixed deposits of PSBs for providing medical benefits under the Employees’ State Insurance (ESI) scheme to around 30 million employees will be rendered unsafe due