Page 40 - Banking Finance April 2018

ARTICLE

THE FINANCIAL

RESOLUTION

AND DEPOSIT

INSURANCE

BILL, 2017

Preamble of the Bill "A systemic vacuum exists with regard to bankruptcy
situations in financial firms. A comprehensive Code on
A BILL to provide for the resolution of certain categories of
Resolution of Financial Firms will be introduced as a Bill in
financial service providers in distress, the deposit insurance
the Parliament during 2016-17. This Code will provide a
to consumers of certain categories of financial services,
specialized resolution mechanism to deal with bankruptcy
designation of systemically important financial institutions,
situations in banks, insurance companies and financial sector
and establishment of a Resolution Corporation for protection
entities. This Code, together with the Insolvency and
of consumers of specified service providers and of public funds
Bankruptcy Code 2015, when enacted, will provide a
for ensuring the stability and resilience of the financial system
comprehensive resolution mechanism for our economy."
and for matters connected therewith or incidental thereto.
The Bill was referred to a Joint Committee of Parliament
Introduction (Chair: Mr. Bhupender Yadav) on August 10, 2017.The
In Budget Speech 2016-17, the Finance Minister had committee consists of members from various regulators like
announced: RBI, SEBI, IRDA, PFRDA to submit a Bill on resolution of
financial firms. The Committee submitted a draft Bill named
About the author as "The Financial Resolution and Deposit Insurance (FRDI)

Bill".
CS (Dr.) P. Siva Rama Prasad
Insolvency Professional Coverage:
Hyderabad Financial Resolution and Deposit Insurance (FRDI) Bill, 2017
is similar to the Insolvency and Bankruptcy Code, 2016. FRDI
deals only with the companies that are in the financial sector

40 | 2018 | APRIL | BANKING FINANCE