Hyderabad: Centre giving backdoor access to corporates to loot people's money says Gudur Narayana Reddy

Hyderabad: Telangana Pradesh Congress Committee (TPCC) Treasurer Gudur Narayana Reddy on Thursday has alleged that the BJP government at the Centre was trying to give corporate sector a backdoor access to savings of small depositors by introducing Financial Sector Development and Regulation (FSDR) Bill.

Narayana Reddy alleged that the BJP government was trying to privatise the public sector banks through FSDR Bill so as to benefit a few corporates by granting them access to the hard-earned money of common depositors.

Originally, the BJP government had introduced Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 which was later dropped due to a controversial 'bail-in' clause.

However, now the same bill is being introduced with some modifications which are more dangerous than the original FRDI Bill. He said the Bill provides for constitution of a new Resolution Corporation (RC) which will monitor the health of financial firms like banks, insurance companies, mutual funds, non-banking finance companies, etc.

In case of failure of any of these firms, the RC will have the mandate to take measures to resolve the crisis without involving RBI and other financial regulatory authorities.

Narayana Reddy said out that the FSDR would make the existence of Reserve Bank of India (RBI) totally irrelevant in handling banking crisis. Of nearly Rs 130 lakh crore deposits, about Rs 81 lakh crore are with public sector banks and approximately 68 per cent of deposits belong to senior citizens.

"With the introduction of FSDR Bill and constitution of a new RC, the RBI will lose its regulatory powers on banks which are in crisis or those who might face crisis in near future," he said.