FRDI bill may take away all your hard-earned money


goDofWar_skr

Well-Known Member
Adept
It is the bail-in clause that is causing all the panic in the minds of the depositors. Will my deposits be used to reduce the liability of the bank? No, you do not need to worry that your deposits will be lost in a bail-in. Your deposits will be insured, just as they are today and there is an additional protection for depositors because the bail-in can be invoked, and your deposits be lost, only if you have given your consent for this to the bank when you signed the deposit forms.

What about the FDs we open online using internet banking? I just created one yesterday and don't recall being presented with any such option which asks me either provide/deny my consent..
Have they hidden it somewhere under their fine print terms and conditions?
 

Lord Nemesis

Overlord
Veteran
^^ There is no such thing and who in their right mind would agree to have their funds be used for bail-in and risk loosing it if they have an option?

Your deposits (savings + FDs + RDs etc) have an insurance of max 1 Lac presently which is guaranteed by RBI. For this, banks have to keep the necessary funds with RBI and cannot touch it. If the bank folds, these funds would be given to customers as the insured amount.

For instance, a person with just 75K amount in bank will get back his full 75K, but a person with 10 Lac will get only 1 Lac. But this is also only when the bank folds.

The FRDI bill proposes a bail-in process (section 52) which can be invoked before the bank reaches a full bankruptcy stage. The bank can use all funds beyond the 1 Lac insurance for bail in even before the bank reaches full bankruptcy if its approved by a regulatory body that govt plans to form. Bank can issue securities against your savings account balance or extend the term of your deposits for an indefinite period (like 15-20 years) for low or nil interest rates and they don't need your consent for doing this. The regulatory body can also decide to void the liability of the bank to pay this money bank to the customers. So technically, you can have all money beyond 1 Lac insurance locked out indefinitely or voided all together.

Under section 29, the bill also gives the regulatory body authority to set the terms for when the bank finally does fold. As per this, they can decide the amount of money that they have to return to the customers. Since no minimum limit is set under this, the regulator can approve an amount more 1 Lac or less than it.
 

Lord Nemesis

Overlord
Veteran
@logistopath Sadly, its never going to happen. We have all sides to blame - especially overzealous bhakts, from all three sides - BJP, Congress and AAP - especially the latter. Each believes their party and leaders are incapable of f***ing up.

I doubt congress has any fanboi's. Everyone ones what they are. Its just usually BJP and AAP who have fans that think that somehow those parties are any different and go to any lengths to spread their propaganda.

In any case, What I would say is just block all posts trying to support/defend political parties or politicians and allow only information sharing and criticism. Normal people have no reason to play the role of spokesperson for any party.

5-10 years back, there was no need for people like us to even bother about politics that much except when its election time and I would have said its alright not to have political discussions altogether on a forum like this. But theses days, the situation is bad and a honest person could have his life turned upside down overnight. The corrupt and the rich will always have a way out, but its always the honest folk that would be the receiving end. Demonetization is a prime example where only the innocent and honest people suffered. Hence awareness of the things going on at least is necessary.
 

goDofWar_skr

Well-Known Member
Adept
I tried reading that actual bill pdf but found it difficult to understand it.
These news articles are somewhat comprehensible to me and what I understand from it is - "Banks now can just use our hard earned money if they are going bankrupt".
Then I feel it will just give encouragement to banks in order to give out more big loans to people like Malya. Because they now have a safety net that if they can't recover the loan then they can always declare bankruptcy and take away all the money of common people.

So I think I'm missing some point here. What is the purpose of a bill like this in the first place?
 

6pack

Well-Known Member
ex-Mod
What is the purpose of a bill like this in the first place?

I'm guessing to bail out public sector banks and insurance companies. If they wash their hands off giving insurance to accounts and deposits, they have more liquidity to splurge on useless things. Plus you already know, many of the ministers and their friends have companies that have taken huge loans and don't feel like giving back anything. Who will take the blame for that? When all the big guys don't want to take the blame and the loss coming with it, the one's taking the full burden will be the nameless and wimpy common people who can't fight back. What will you do when your whole life's savings have been lost? Nobody will be in any state to fight out anyone because they don't have any money left and will be trying hard to eat just one meal a day.
 

honest1

Well-Known Member
Adept
http://www.firstpost.com/business/f...ues-to-allay-depositors-concerns-4258241.html

So are my bank deposits safe?

There are a number of checks against the arbitrary use of this tool. First, the Resolution Corporation can only use the tool in consultation with the regulator. Second, this tool can only be used prospectively, that is, in the future, either on classes of liabilities that are specified in regulations in the future, or on instruments where parties in the future will agree to some liabilities in the future. Third, the Corporation will have to send a report to the Central Government, to be laid in Parliament, explaining why a bail-in instrument was necessary in a particular case. Fourth, if any creditor, including a depositor receives any money on account of bail-in, which is less than what they would have received during liquidation, then they will be compensated for the difference. Hence, bank deposits will not be touched, even with the passage of this Bill.
 

vivek.krishnan

If you cant see the green dot, I'm offline :P
Veteran
I'm guessing to bail out public sector banks and insurance companies. If they wash their hands off giving insurance to accounts and deposits, they have more liquidity to splurge on useless things. Plus you already know, many of the ministers and their friends have companies that have taken huge loans and don't feel like giving back anything. Who will take the blame for that? When all the big guys don't want to take the blame and the loss coming with it, the one's taking the full burden will be the nameless and wimpy common people who can't fight back. What will you do when your whole life's savings have been lost? Nobody will be in any state to fight out anyone because they don't have any money left and will be trying hard to eat just one meal a day.

I still think this is way over the top. Even Scroll has put up a new article....
 

6pack

Well-Known Member
ex-Mod
I don't believe anything the RBI or Govt says. Remember all the articles during Aadhaar that said it was voluntary? No one will be forced? Now its become forced down everybody's throats even if we don't take subsidy. These government people say one thing and stab you in the front the next moment without hesitation.

All this bail in has come when all the Govt large scale PSU banks are folding up or merging into one another and their airline business is going into loss. They are trying to save the banks and the companies the banks gave money to by passing a bill which will water down the liabilities of the companies. It looks over the top but read between the lines. Look for loop holes in it like you were the company holding a debt of a 1000 crores to a bank and you will see how beneficial this bill is for you.
 

nimod

Well-Known Member
Adept
I don't believe anything the RBI or Govt says. Remember all the articles during Aadhaar that said it was voluntary? No one will be forced? Now its become forced down everybody's throats even if we don't take subsidy. These government people say one thing and stab you in the front the next moment without hesitation.

All this bail in has come when all the Govt large scale PSU banks are folding up or merging into one another and their airline business is going into loss. They are trying to save the banks and the companies the banks gave money to by passing a bill which will water down the liabilities of the companies. It looks over the top but read between the lines. Look for loop holes in it like you were the company holding a debt of a 1000 crores to a bank and you will see how beneficial this bill is for you.

Exactly these are my fears.

There's one huge bomb in our economy that no one talks about. LIC.
Its going to be bigger than PSBs. Its riddled with bad debts.
and it will have a huge impact.
 

vivek.krishnan

If you cant see the green dot, I'm offline :P
Veteran
There's one huge bomb in our economy that no one talks about. LIC.
Its going to be bigger than PSBs. Its riddled with bad debts.
and it will have a huge impact.

LIC might end up being the next UTI64 ....
 

honest1

Well-Known Member
Adept
5-10 years back, there was no need for people like us to even bother about politics that much except when its election time and I would have said its alright not to have political discussions altogether on a forum like this. But theses days, the situation is bad and a honest person could have his life turned upside down overnight. The corrupt and the rich will always have a way out, but its always the honest folk that would be the receiving end. Demonetization is a prime example where only the innocent and honest people suffered. Hence awareness of the things going on at least is necessary.

The awakening is good, but if this has happened before 5-10 years, we would have been in much better position today. List of Scams for easy reference.

The NPAs, LICs, which we are talking now, would have been prevented well in time. Currently, the government is forcing banks to show NPAs for loans which should have been uncovered much before.

Actually, the life of honest person have been turned upside down much before the current "awakening" happened !
 

Lord Nemesis

Overlord
Veteran
^^ No scam can happen in this country without involvement of all major parties and payouts go to all. Scams come out into the open when differences arise. Both Congress and BJP will be involved and make money in all scams. Even in case of Vijaya Mallya, both congress and BJP helped him. It is with BJP help that he was able to escape the country. Last year end, there was a alert against him at all airports which prevented him from boarding any flight to go outside the country. It was with the help of BJP Politicians that he got it cancelled and was able to take off. Even how they are only trying to bring him back because the supreme court fleeced the hide of their back over it.

If you are going to say that BJP is some how clean, can you explain to me why they have so many assets and live so lavishly when its quite disproportional to the income that they declared. Does Nitin Gadkari look live he lives the life of somebody with an annual income less than 2.5 Lac? Does any BJP politician live in proportion to the peanuts they declare as income every year? Go and check their own affidavits on EC website. Its is all public information and directly given by them on stamp paper, but you people still conveniently ignore it.

During demonetization, was a single BJP Politician booked? What any congress politician booked for that matter? BJP claimed that it was all done to catch black money. The cost of demonetization went into lac's of crores and only about 6-7k crore of black money was caught at the end of it. That is an amount that they could have easily retrieved just by booking one BJP politician like Nitin Gadkari, forget all of them. No money retrieved from any key congress leader during after demonetization. They literally gave them a clean chit int hat manner.

The life of of common man was going on amidst those scams even 5-10 years back and while the politicians did as they pleased, but didn't dare touch the every day life of the common man. The difference now is that current govt is so greedy and drunk on power that they want control over that too

With the kind of corrupt criminals in both these parties, neither should ever have ever got into power if people just like them didn't vote them into power. People in this country tend to be so corrupted and dishonest themselves that they don't like choosing people that are cleaner than themselves. Any person is not willing to get his hands dirty with corruption, caste or religious discord is not even given a second look. They go and vote for for these shitty parties like Congress, BJP, AAP etc. For them, this is a well deserved consequence, but minority few honest people also have to end up suffering because of them.
 

drkrack

Heart Repairer
Adept
^^ No scam can happen in this country without involvement of all major parties and payouts go to all. Scams come out into the open when differences arise. Both Congress and BJP will be involved and make money in all scams. Even in case of Vijaya Mallya, both congress and BJP helped him. It is with BJP help that he was able to escape the country. Last year end, there was a alert against him at all airports which prevented him from boarding any flight to go outside the country. It was with the help of BJP Politicians that he got it cancelled and was able to take off. Even how they are only trying to bring him back because the supreme court fleeced the hide of their back over it.

If you are going to say that BJP is some how clean, can you explain to me why they have so many assets and live so lavishly when its quite disproportional to the income that they declared. Does Nitin Gadkari look live he lives the life of somebody with an annual income less than 2.5 Lac? Does any BJP politician live in proportion to the peanuts they declare as income every year? Go and check their own affidavits on EC website. Its is all public information and directly given by them on stamp paper, but you people still conveniently ignore it.

During demonetization, was a single BJP Politician booked? What any congress politician booked for that matter? BJP claimed that it was all done to catch black money. The cost of demonetization went into lac's of crores and only about 6-7k crore of black money was caught at the end of it. That is an amount that they could have easily retrieved just by booking one BJP politician like Nitin Gadkari, forget all of them. No money retrieved from any key congress leader during after demonetization. They literally gave them a clean chit int hat manner.

The life of of common man was going on amidst those scams even 5-10 years back and while the politicians did as they pleased, but didn't dare touch the every day life of the common man. The difference now is that current govt is so greedy and drunk on power that they want control over that too

With the kind of corrupt criminals in both these parties, neither should ever have ever got into power if people just like them didn't vote them into power. People in this country tend to be so corrupted and dishonest themselves that they don't like choosing people that are cleaner than themselves. Any person is not willing to get his hands dirty with corruption, caste or religious discord is not even given a second look. They go and vote for for these shitty parties like Congress, BJP, AAP etc. For them, this is a well deserved consequence, but minority few honest people also have to end up suffering because of them.

Why are you behind Gadkari Man? There's a DK Shivkr in Karnataka Congress, who's equivalent of ten Gadkaris. PC / Karthik is ten times of DKS BTW.
Coalgate Koda & Gupta were found guilty of Corruption, which points to MMS as well now. So a time will come when BJP will be on the receiving end. Currently after winning all possible elections post Demonetisation, public opinion isn't against BJP ; so there's no need for introspection for them, which will lead to overconfidence & their downfall eventually. If BJP loses Gujarat which I think has very good possibility, will set them for introspection. Even if they lose 2019 ( it'll be till 2029 if they build the Ram Mandir), Modi will be much Lethal in opposition with majority in Upper house.

Demonetisation is quite small when you compare it with Bigger Scams like Secularism, Caste Based Reservations and Gareebi Hatao etc...
Before Demonetisation people were thinking that "we're poor & Govt isn't doing enough for us", post Demonetisation it was like "we have enough wealth, we should save it from our Govt". This was the Most important development after Demonetisation apart from overnight rise in numbers of Economists in the country.

Coming to RW etc, The phenomenon is not limited to India alone, Globally if you see in Eu / USA there's a resurgence of RW ; who are fed up of minority appeasement at the cost of Majority community. Combined with terrorist attacks and medieval practices of Religion of peace I don't think its going to be Curtailed anytime soon. Imagine we took 70 yrs to ban instant triple Talaq, which Pak banned 30yrs ago. Nehru codified Hindu Personal Law boards but didn't touch Muslim Personal Law boards. Imagine Manishankar Aiyyar akining Raga elevation to Mughals Taj Poshi. How many parties will survive on Minority Appeasement and reservation politics? Spineless & equally corrupt opposition is the main reason for rise of BJP. In the absence of effective opposition, irrespective of our political inclination, We the Citizens of India have to play the Role of Opposition in the better interest of democracy.
 

Lord Nemesis

Overlord
Veteran
When I say "Look I know congress is corrupt, but BJP and is just as corrupt (and to boot, most of the members are hardcore criminals involved in countless cases) and give an example with one person", the BJP fanbois immediately go "Look, this guy from congress is also corrupt". So, some how, a congress politician being corrupt makes it perfectly alright for BJP politicians to be corrupt and in fact cleans away their corruption and makes them clean?

This reminds me of a debate I had with somebody a while back. He was a supporter of BJP although not totally a bhakth to the degree I have found people online..

He says that its necessary to stop corruption of congress politicians, but he still thinks that corruption is necessary for the people and so he would never consider voting for somebody (a third alternative) who is honest and clean than him. He says that congress politicians should not be able to indulge in corruption and govt offices should not be allowed to take bribes for normal work, but he wants to be able to pay bribes when he is caught on a traffic violation like jumping a traffic signal or accident or when he wants to get work done without waiting for his turn and for evading taxes. He says that corruption of this nature should be allowed because he thinks its not really corruption. He also agrees that BJP is just as corrupt as congress, but he doesn't mind giving them his vote as they are are more "nationalistic and patriotic" than congress and its alright for them to "loot" the nation a bit.

No, he wan't drunk when he said all that and he was dead serious too. I thought he was nuts, but I have come to realize that is is the anatomy of the mindset of a typical BJP Bhakth. AAP fanbois aren't much different. There are guys who went for a AAP anti corruption rally in the city the same day they get fake medical and travel receipts for tax evasion..Most people in this country don't even seem to even desire a clean govt because they can't feel good about themselves when they are also pointed as part of the corruption in this country. So even if a cleaner option materializes, they would still chose one of the corrupt ones.
 

Marcus Fenix

Well-Known Member
Veteran
When I say "Look I know congress is corrupt, but BJP and is just as corrupt (and to boot, most of the members are hardcore criminals involved in countless cases) and give an example with one person", the BJP fanbois immediately go "Look, this guy from congress is also corrupt". So, some how, a congress politician being corrupt makes it perfectly alright for BJP politicians to be corrupt and in fact cleans away their corruption and makes them clean?

This reminds me of a debate I had with somebody a while back. He was a supporter of BJP although not totally a bhakth to the degree I have found people online..

He says that its necessary to stop corruption of congress politicians, but he still thinks that corruption is necessary for the people and so he would never consider voting for somebody (a third alternative) who is honest and clean than him. He says that congress politicians should not be able to indulge in corruption and govt offices should not be allowed to take bribes for normal work, but he wants to be able to pay bribes when he is caught on a traffic violation like jumping a traffic signal or accident or when he wants to get work done without waiting for his turn and for evading taxes. He says that corruption of this nature should be allowed because he thinks its not really corruption. He also agrees that BJP is just as corrupt as congress, but he doesn't mind giving them his vote as they are are more "nationalistic and patriotic" than congress and its alright for them to "loot" the nation a bit.

No, he wan't drunk when he said all that and he was dead serious too. I thought he was nuts, but I have come to realize that is is the anatomy of the mindset of a typical BJP Bhakth. AAP fanbois aren't much different. There are guys who went for a AAP anti corruption rally in the city the same day they get fake medical and travel receipts for tax evasion..Most people in this country don't even seem to even desire a clean govt because they can't feel good about themselves when they are also pointed as part of the corruption in this country. So even if a cleaner option materializes, they would still chose one of the corrupt ones.
Well.You cannot really blame the politicians.
The problem is that we Indians are a corrupt lot in every walk of life from the smallest thing like jumping a queue or ignoring traffic signals and the funniest thing is we think that those are our rights as Indians.
After all people get the leaders they deserve.
 

drkrack

Heart Repairer
Adept
When I say "Look I know congress is corrupt, but BJP and is just as corrupt (and to boot, most of the members are hardcore criminals involved in countless cases) and give an example with one person", the BJP fanbois immediately go "Look, this guy from congress is also corrupt". So, some how, a congress politician being corrupt makes it perfectly alright for BJP politicians to be corrupt and in fact cleans away their corruption and makes them clean?

This reminds me of a debate I had with somebody a while back. He was a supporter of BJP although not totally a bhakth to the degree I have found people online..

He says that its necessary to stop corruption of congress politicians, but he still thinks that corruption is necessary for the people and so he would never consider voting for somebody (a third alternative) who is honest and clean than him. He says that congress politicians should not be able to indulge in corruption and govt offices should not be allowed to take bribes for normal work, but he wants to be able to pay bribes when he is caught on a traffic violation like jumping a traffic signal or accident or when he wants to get work done without waiting for his turn and for evading taxes. He says that corruption of this nature should be allowed because he thinks its not really corruption. He also agrees that BJP is just as corrupt as congress, but he doesn't mind giving them his vote as they are are more "nationalistic and patriotic" than congress and its alright for them to "loot" the nation a bit.

No, he wan't drunk when he said all that and he was dead serious too. I thought he was nuts, but I have come to realize that is is the anatomy of the mindset of a typical BJP Bhakth. AAP fanbois aren't much different. There are guys who went for a AAP anti corruption rally in the city the same day they get fake medical and travel receipts for tax evasion..Most people in this country don't even seem to even desire a clean govt because they can't feel good about themselves when they are also pointed as part of the corruption in this country. So even if a cleaner option materializes, they would still chose one of the corrupt ones.

You seem to be taking Modiji Image build up by Bhakts pretty seriously I guess. However Good Modiji is, he's not a saint to put his own colleague like Gadkari behind Bars for alleged corruption without a compelling media Outrage. I'm not justifying any corruption but BJPs corruption will be investigated when they're out of Power. No Party is completely honest ; but as I told previously you don't get to choose between JFK vs Donald Trump or LB Shastri vs Modiji, where the choice would have been obvious. You'll always be forced to select lesser of the evils, in which case BJP getting voted to power seems pretty straightforward. That is what the surveys reflect if LS Elections were held today...

https://m.timesofindia.com/india/if...ups-mega-online-poll/articleshow/62086778.cms

Now coming to AAP, they had comfortably taken the vacuum created by almost rudimentary Left. Modi & resurgence of RW has made Left Wing Politically relevant again. AAP is the party which came with lots of promises of providing a good alternative but its over ambitious motor mouth President spiralled its downfall sooner than expected. At a point of time I even got primary membership forms for AAP ; but decided otherwise. Still if they Vow not to take any corporate donations for Party funds and do away with Skull Cap brand of Politics it should be a great alternative to everyone concerned about the country.

Bhakts are the same people who previously used to go for vacation during Election holidays. They never found anyone compelling enough to Vote. So, Secular Parties controlled the democracy with wooing Minority Clerics, handful Dalit Leaders, opinion makers in Mainstream media. Now the things have changed and the Bhakts have taken voting seriously ; the credit goes to the charismatic personality of Modi, Over-the-Top Minority Appeasement by Secular Parties & of course properly planned Social media campaigns. most of Secular Parties neglect this group of voters. Their United voting support is the main reason BJP does very well in Urban areas. Remove Modi from the equation & rest of BJP doesn’t fair better than opposition. That's why from Delhi Muncipal elections to Gujarat Assembly he happens to be the poster boy for BJP.

Gujarat Elections will be a landmark judgment for BJP ( Getting elected for 6th term without Modi as CM this time is no Small achievement) and if they lose probably it'll limit their over confidence and guide for course correction. But this BJP campaign was the worst in years; it was utterly negative without any kind of optimism and relevance, so let's see. I hope they lose Gujarat Elections, so a introspection is forced and consider fulfilling their election promises.

Congress still relies on family, and their Feudal mindset is not going to change. Reservation politics like Patidars, and Skull Cap replaced by Temple Run in Gujarat Elections isn't anything new for them. This is the same Rotten campaign formula which they are still sticking to. I felt they had a better chance at winning had they not campaigned, they perfectly danced to a script set by BJP, Janeau Dhari Shivbhakt was totally uncalled for...
Come 2018 Karnataka elections, Rahul G will be seen with Skull Cap, unapologetic about forcing Kannada Linguistic identity, promising separate religion status for Lingayaths etc. Its foolish to expect anything new from them. Leave digital push, they would not have made a single app for governance had they been in Power.


Well.You cannot really blame the politicians.
The problem is that we Indians are a corrupt lot in every walk of life from the smallest thing like jumping a queue or ignoring traffic signals and the funniest thing is we think that those are our rights as Indians.
After all people get the leaders they deserve.

Yes Politicians are basically citizens, the most Corrupt amongst us becomes a politician. To be truthful We Indians don't prefer a honest Politician or Beurocrat, we prefer the one who's corrupt and who is in our favor irrespective of the ethical standards.

Coming back to the OT of FRDI, two most important questions ;

How many Nationalized Banks have gone bankrupt in last 30yrs? Are Our concerns totally far from real?

What's the Government Stake Holding in various Nationalized banks? What Does bankruptcy for Nationalized banks mean?
 

rdst_1

Well-Known Member
Veteran
Coming back to the OT of FRDI, two most important questions ;

How many Nationalized Banks have gone bankrupt in last 30yrs? Are Our concerns totally far from real?

What's the Government Stake Holding in various Nationalized banks? What Does bankruptcy for Nationalized banks mean?

If the banks are in such a good health, then what is the need for such a radical bill being presented.
My father, who was a banker all his life, used to be so pissed at how banks in our country have been run. The RBI, has never been a successful regulator and without a strong regulator most of the banks have descended into bad loans, mostly at the hands of politically related entities.

Even if the government stake holding is high and bankruptcy would probably mean a government bail out, then that doesn't mean there are no losses. Even if the common people's money would be safe due to bail out, the people will lose out on the promised 'Vikas' since the money meant for that will be used to pay for the billionaires' NPAs.

So, yes, the people will be angry when they see that instead of making stricter rules on how banks hand out big loans and increasing accountability for people who take such loans, the laws being proposed are instead providing a way out for banks to write off such loans by holding hostage other people's money.

The optimists like you might believe that such a situation might never arise but you can't say other are wrong when they question why such options/loopholes are being presented in a law. Wouldn't you say that it would serve the nation better if instead, laws were passed to make the selling of assests and other proceedings faster in case of an NPA and make it stricter for such big loans to be passed in the first place.
 

vivek.krishnan

If you cant see the green dot, I'm offline :P
Veteran
My father, who was a banker all his life, used to be so pissed at how banks in our country have been run. The RBI, has never been a successful regulator and without a strong regulator most of the banks have descended into bad loans, mostly at the hands of politically related entities.

Same here as well, relatives have the same opinion. Politics is responsible for the mess we are in, the earlier ones and then the latter.
 

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