When Banks Fail
A “bail-in” can be provided without undermining depositor interests
“Bail-in” refers to statutory power given to resolution authorities to convert existing creditors to shareholders. This has triggered fears that bank deposits, for instance, may not be safe. That need not be the case. An insured deposit cannot be bailed-in. India’s Rs 1 lakh deposit insurance has remained unchanged for years. It should be immediately enhanced to cover the size of most deposits. For remaining deposits, a “bail-in” provision should apply only after consent of the deposit holder which will have to be compensated with higher interest rates. It’s possible to simultaneously provide all resolution tools and safeguard depositor interests. That should be the focus of parliamentary debate on this legislation.
(Source: Time of India, 13 December 2017) more
“Bail-in” refers to statutory power given to resolution authorities to convert existing creditors to shareholders. This has triggered fears that bank deposits, for instance, may not be safe. That need not be the case. An insured deposit cannot be bailed-in. India’s Rs 1 lakh deposit insurance has remained unchanged for years. It should be immediately enhanced to cover the size of most deposits. For remaining deposits, a “bail-in” provision should apply only after consent of the deposit holder which will have to be compensated with higher interest rates. It’s possible to simultaneously provide all resolution tools and safeguard depositor interests. That should be the focus of parliamentary debate on this legislation.
(Source: Time of India, 13 December 2017) more
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Why should the public and depositors of a bank to be punished for the fault and favoritism of the Bank staff. Rules and Norms are clear to whom to be lent. However if the debtor fails to pay the staff authorised for the loan to be penalise. Over a period of time then the lending and repayment will work properly. more
Dec 16
Could not understand why the Govt. wish to punish innocent depositors. Is it for their unflinching faith shown in our banking system. Govt. is leaving defaulters, fraudsters in banks and industry, but punishing depositor, who saved his hard earnings for a rainy day. Ture, the Govt. can not provide relief to Private sector employees upon retirement though they paid Income tax throughout. Making tall claims about Insolvency law. What is great about it . Does it resolve NPAs really. It is a well known fact that insolvency proceeding realisation is peanuts compared to hill size debts. Surprisingly, industries are becoming sick but not industrialist. If the Govt. really intends to recover the NPA amounts, they should prosecute concerned industrialists too and confiscate their personal properties. Then and then only it create fear among defaulters and pay immediately. Else, Bankruptcy law etc. will be an eye wash. To save these flaws now they are focussing on depositors money for appropriation. Again, it is a fraud played by Govt. How depositors responsible for a bank failure. Bank failed becasue of its bad management. Then why depositors money is to be approprited. It should be resisted at any cost. Demonetization resulted in death of some people, and now misappropriation of deposits by Govt. results in further deaths. more
Dec 16
The limit of Rs. 1 Lac should be increased in proportion to the price index rise from the date when present limit was decided. A further increase in limit should be fixed for senior citizen. more
Dec 14
Rather, all the Depositors must be given 100% security. What is their fault on NPAs which occured due to inefficiency of UNACCOUNTABLE Bank officials/Govt/corrupt system/culprit borrowers? more
Dec 15
Banks should not be allowed to appropriate any deposit of any one, to bail out banks. Indiscriminate management of the banks by the top should not be further burden to the depositers. Already top managements made irreparable loss to the depositers by creating bad debt and government is pumping large quantity of public money to bail out banks. more
Dec 14
The govt cannot do this. First demonetisation 2nd GST.Now the FRDI.If the govt cannot collect the money from the defaulters hang them.but don't charge the depositers. I think this step will be fall of BJP govt. Attach all assests of the defaulters and his family members with out wasting time.A coman man can't not think of going to London.where as Mr Mallya is spending lavish life in London.This is because bof the politicians hand in glove with out. Plug the loophole and attach all assests if u can't arrest him. more
Dec 13
