FRDI, fried stuff and stuffed pillows – OPINION – Business Line

Motu’s living room had a ransacked look about it as Chotu entered. Pillows, cushions and mattresses were strewn all over.

Kya hua Motu, was there a robbery here?

Nahin re , it’s all my work. I’m trying to undo what I did some months ago.

And what was that, Motu?

I’ll tell you that in a minute. Will you please help me hire a currency-counting machine from somewhere?

Now what do you need that for, Motabhai? You don’t run a bank…

I need the machine to count what’s stuffed in these cushions, pillows and mattresses, Chotu.

Motu, don’t tell me you have currency in there…

Of course, Chotu, I got scared after reading all those stories about some FRDI Bill that Modiji was planning to bring. I know FRIED stuff like pakoda and bajji but I don’t know FRDI.

But what’s the connection between that and stashing currency into your pillows?

Samjha kar , Chotu, sometimes your sharp brain fails you. I think you need some rosogollas and mishti doi now…

Those are your favourites, Motu. Were you scared that your money will be lost?

Exactly! There were all those forwards on WhatsApp saying that the bank will take away my deposits to bail itself out…

Buddhu , you believed them? And what’s changed now?

Chotu, BusinessLin e has reported today that Modiji has killed the FRDI Bill… kuch samaj nahin aaraha hai ….all I know is that my money can now go right back into my bank account.

You’re right, Motu, the FRDI Bill has been dropped but there never was any risk to your money in the first place. No government can afford to allow a bank owned by it to fail its depositors. It will lead to a first-rate financial crisis.

But what was all that drama about then, Chotu?

Oh, Modiji and his friends tried to shoot themselves in their feet but the outrage from people like you and me stopped them.

Stop talking in riddles, Chotu?

See, the FRDI Bill was a lousy idea to start with given that people see banks as guardian angels of their money. Over 60 per cent of the financial savings of households is held as deposits in banks. Playing with that kind of trust is dangerous at one level and downright silly at another. It’s amazing that the FRDI Bill did not cause a run on our banks.

I know. But I ran to my bank, withdrew my money and stitched it all up in my mattress and pillows….

And second, the timing was all wrong. The public faith in the banking system is already shaken by the skeletons tumbling out of the cupboards of banks every day. If ever-increasing NPAs are not enough, mega scams seem to be routine now. Perceptions are as important as reality in the financial business. In this environment, the ‘bail-in’ clause was a disastrous idea to even suggest, forget implement.

So you think Modiji has done the right thing now by killing the Bill?

India is still not ready for ‘bail-in’ rescues of banks and I guess Modiji had no choice after all that anger expressed by people like us. Remember, he will soon be at our doorsteps to seek our votes as elections are round the corner.

Bye Chotu, I’ll have to now run and break this news to Lambu, Guddu and Bittu who also have stuffed pillows at home… And, by the way, can you get me a counting machine?

Published on July 20, 2018

via FRDI, fried stuff and stuffed pillows – OPINION – Business Line

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