The Financial Resolution and Deposit Insurance Bill, 2017 has been referred to a Joint Parliamentary Committee of both the Houses.
The committee headed by Chairperson Bhupender Yadav will examine and present a Report to the Parliament.
The Joint Committee will seek views and suggestions from various stakeholders and the public at large on the provisions of the aforesaid Bill.
The proposed Bill seeks to provide for the resolution of certain categories of financial service providers in distress. It also deals with the deposit insurance to consumers of certain categories of financial services, designation of systemically important financial institutions.
Special provisions have been made to establish a Resolution Corporation for protection of consumers of specified service providers and of public funds.
The Resolution Corporation would be empowered with some new methods of resolution, such as bail-in and bridge service providers. The entity will have a chairperson and its members will include representatives from the finance ministry, Reserve Bank of India and Securities and Exchange Board of India, among others.
It also aims to inculcate discipline among financial service providers in the event of a crisis, by limiting the use of public money to bail out distressed entities.
The bill together with the Insolvency and Bankruptcy Code, 2016 is expected to provide a comprehensive resolution mechanism for the economy.
The Financial Resolution and Deposit Insurance Bill was referred to the joint committee on August 10, during the monsoon session, and the panel was constituted on August 19.
It has 20 members from the Lok Sabha and 10 from the Rajya Sabha. Bhupender Yadav, the latter’s member from the ruling Bharatiya Janata Party, heads it.