Government Likely to Withdraw FRDI Bill
The government is set to withdraw the controversial Financial Resolution and Deposit Insurance (“FRDI”) Bill, 2017 after persistent opposition and widespread concern over its ‘bail-in’ clause. The ‘bail-in’ clause allowed for depositors’ money to be used in the resolution mechanism for banks. The FRDI Bill was introduced in the Lok Sabha on August 11, 2017 and is currently being assessed by a joint committee of the Parliament.
Cabinet Approves Insolvency and Bankruptcy (Amendment) Bill, 2018
The Union Cabinet, on July 18, 2018 approved the Insolvency and Bankruptcy Code Amendment Bill, 2018 (“Amendment Bill”). The Amendment Bill brings significant changes to the Insolvency and Bankruptcy Code, 2016 by including home owners under the category of financial creditors who can initiate insolvency proceedings. The Amendment Bill is set to be tabled in the Lok Sabha during the on-going monsoon session of the Parliament.
Lok Sabha Approves Fugitive Economic Offenders Bill
The Lok Sabha, on July 19, 2018 approved the Fugitive Economic Offenders Bill (“FEO Bill”), 2018. The FEO Bill prescribes stringent measures to discourage economic offenders from fleeing the country in order to evade punitive sanctions and not subject themselves to the due process of law in India. The Lok Sabha passed the FEO Bill with a voice vote. The FEO Bill has defined “fugitive economic offender” as an individual who has committed a scheduled offence(s) involving a minimum amount of INR 100 crores and has absconded from India or refused to come back to the country to avoid or face criminal prosecution.
Introduction of Bill to Check Unregulated Deposits
The ‘Banning of Unregulated Deposit Schemes Bill, 2018 (“Bill”), proposing ban on unregulated deposits and up to 10-year jail term for perpetrators of Ponzi schemes was introduced in the Lok Sabha on July 18, 2018. The Bill deals with default in repayment to depositors and attachment of assets of entities engaged in such fraudulent activities.