Money in your bank may be at a risk if this law gets passed...
You deposit your money in a bank as a "Savings Deposit or Fixed Deposit" to use it whenever you want. You have no clue as to how well the bank is managed.
Now Mr.Narendra Modi (Prime minister of India) & Mr.Arun Jaitely have got a bill approved by the Cabinet called "The Financial Resolution and Deposit Insurance (FRDI) Bill, 2017" and this has now been referred to a Joint Parliamentary Committee before getting it passed in the Parliament.
This Bill also introduces the provision for a “bail-in”, whose purpose is to provide capital to absorb the losses of a bank and ensure its survival. Here, survival does not mean safety of depositors’ money, but restoration of capital of the bank.
The bail-in empowers the bank to cancel a liability owed by the bank or change the form of an existing liability to another security.
In simple words, it means that your savings account balance of Rs.15 lacs, can be reduced to Rs.1 lac, which is mandatory by law. Or they can convert your savings account balance of Rs.15 lacs to a Fixed Deposit, repayable after 5 years, giving you of 5% annual interest.
And you can do nothing about it. If you had kept that money for your daughter's marriage, it is bad luck and you cannot access your money for the next 5 years.
Source - Thehindu