Topic Of The Day:-“A Welcome Retreat: Withdrawing The Frdi Bill”
In Just Under 12 Months Since Its Introduction In Parliament, The Centre Has Quietly Withdrawn The Financial Resolution And Deposit Insurance Bill, 2017. The Decision To Seek The Lok Sabha’s Approval To Withdraw The Legislation This Week Is A Clear Acknowledgement By The Government That It Had Underestimated The Extent And Intensity Of Public Opposition To The Proposed Law. One Provision In The Bill Had, In Particular, Generated The Greatest Debate And Attracted The Fiercest Criticism And Ultimately Proved To Be Its Very Undoing: The “Bail-In” Clause. That Banks, By The Very Nature Of Their Business, Are Essentially Dependent On The Funds Lent To Them By Depositors To Serve As The Pool Of Lendable Resources From Which They Provide Credit To Borrowers Is Well Known And Requires No Elaboration. So, When A Depositor Apprehends That Her Hard-Earned Savings Placed In A Bank May Be At Risk From A Law That Forces Her To Partake In The Pain Of Financial Losses In Case Her Bank Is Forced Into Resolution On Account Of Distress, She Will Naturally Fear Such A Legislation. The Government Did Make Strenuous Efforts To Reassure The Public, Explaining The Rationale For The Bill As Well As The Built-In “Safeguards” Relating To The Bail-In Provision. However, Its Exertions Made Little Headway. Union Minister Piyush Goyal Finally Informed The Joint Parliamentary Committee That Was Reviewing The Bill That A “Resolution Of These Issues Would Require A Comprehensiveexamination And Reconsideration”, And That Therefore The Government Deemed It “Appropriate” That The Bill Be Withdrawn. However, The Need For A Specialised Dispensation To Cope With Large Financial Corporations On The Verge Of Going Bust Cannot Be Overstated, Especially Given The Contagion Risk That A Bank Failure Can Pose To Overall Financial Stability. The Withdrawal Of The FRDI Bill Should Therefore Be Used As An Opportunity By Policymakers To Reappraise The Existing Framework For Resolving Bankruptcy Scenarios Among Financial Entities. While Such A Review Ought To Include An Evaluation Of The Progress Made By The Insolvency And Bankruptcy Code In Addressing The Crucial Issue Of Debt Resolution In The Banking Sector, It Must Also Look At Ways To Strengthen The Deposit Insurance And Credit Guarantee Corporation. Set Up In The Early 1960s In The Aftermath Of The Collapse Of Two Banks, The DICGC, Which Guarantees Repayment Of Bank Deposits Up To ₹1 Lakh In Case A Bank Is Liquidated, Has Not Reviewed The Amount Under Guarantee Since 1993. This Anomaly Must Be Addressed, Especially At A Time When Several State-Run Public Sector Banks Have Been Roiled By A Series Of Frauds And High Levels Of Bad Loans. Any Measure That Helps Prevent Further Erosion Of Public Faith In The Beleaguered Banking System Would Undoubtedly Be Very Welcome.
Words And Meanings
1) Seek
Meaning: Attempt To Find (Something).
Example: “They Came Here To Seek Shelter From Biting Winter Winds”
Synonyms: Search For, Try To Find.
2) Underestimated
Meaning: Estimate (Something) To Be Smaller Or Less Important Than It Really Is.
Example: “The Government Has Grossly Underestimated The Extent Of The Problem”
Synonyms: Set Too Low, Underrate.
3) Intensity
Meaning: The Quality Of Being Intense.
Example: “The Pain Grew In Intensity”
Synonyms: Strength, Power.
4) Fiercest
Meaning: Having Or Displaying A Violent Or Ferocious Aggressiveness.
Example: “Fierce Fighting Continued Throughout The Day”
Synonyms: Ferocious, Savage.
5) Criticism
Meaning: The Expression Of Disapproval Of Someone Or Something On The Basis Of Perceived Faults Or Mistakes.
Example: “He Received A Lot Of Criticism”
Synonyms: Censure, Reproval.
6) Undoing
Meaning: A Person’s Ruin Or Downfall.
Example: “He Knew Of His Ex-Partner’s Role In His Undoing”
Synonyms: Downfall, Defeat.
7) Pool
Meaning: A Shared Supply Of Vehicles Or Resources To Be Drawn On When Needed.
Example: “A Car Pool”
Synonyms: Supply, Common Supply.
8) Lendable
Meaning: Grant To (Someone) The Use Of (Something) On The Understanding That It Will Be Returned.
Example: “Stewart Asked Me To Lend Him My Car”
Synonyms: Loan, Give Someone The Loan Of.
9) Elaboration
Meaning: The Process Of Developing Or Presenting A Theory, Policy, Or System In Further Detail.
Example: “His Work Led To The Elaboration Of A Theory Of Evolution”
10) Apprehends
Meaning: Arrest (Someone) For A Crime.
Example: “A Warrant Was Issued But He Has Not Been Apprehended”
Synonyms: Arrest, Catch.
11) Partake
Meaning: Join In (An Activity).
Example: “Visitors Can Partake In Golfing Or Clay Pigeon Shooting”
Synonyms: Participate In, Take Part In.
12) Distress
Meaning: Extreme Anxiety, Sorrow, Or Pain.
Example: “To His Distress He Saw That She Was Trembling”
Synonyms: Anguish, Suffering.
13) Strenuous
Meaning: Requiring Or Using Great Effort Or Exertion.
Example: “The Government Made Strenuous Efforts To Upgrade The Quality Of The Teaching Profession”
Synonyms: Arduous, Difficult.
14) Reassure
Meaning:
Example:
Synonyms:
Antonyms:
15) Rationale
Meaning: Say Or Do Something To Remove The Doubts And Fears Of (Someone).
Example: “He Understood Her Feelings And Tried To Reassure Her”
Synonyms: Put/Set Someone’s Mind At Rest.
16) Exertions
Meaning: Physical Or Mental Effort.
Example: “She Was Panting With The Exertion”
Synonyms: Effort, Strain.
17) Headway
Meaning: Forward Movement Or Progress, Especially When This Is Slow Or Difficult.
Example: “The Ship Was Making Very Little Headway Against Heavy Seas”
Synonyms: Make Progress, Make Strides.
18) Comprehensive
Meaning: Including Or Dealing With All Or Nearly All Elements Or Aspects Of Something.
Example: “A Comprehensive List Of Sources”
19) Reconsideration
Meaning: The Act Of Considering Something Again; Review.
Example: “A Careful Reconsideration Of The Existing Approaches”
Synonyms: Review, Re-Examination.
20) Deemed
Meaning: Regard Or Consider In A Specified Way.
Example: “The Event Was Deemed A Great Success”
Synonyms: Regard As, Consider.
21) Bust
Meaning: (Of A Group Or Couple) Separate, Typically After A Quarrel.
Example: “Now They’ve Bust Up, She Won’t Inherit The House”
22) Overstated
Meaning: State Too Strongly; Exaggerate.
Example: “I Overstated My Case To Make My Point”
Synonyms: Exaggerate, Overdo.
23) Contagion
Meaning: The Spreading Of A Harmful Idea Or Theory.
Example: “The Contagion Of Disgrace”
24) Reappraise
Meaning: Appraise Or Assess Again Or In A Different Way.
Example: “The Tory Party Has Reappraised Its Strategy”
25) Aftermath
Meaning: The Consequences Or After-Effects Of A Significant Unpleasant Event.
Example: “Food Prices Soared In The Aftermath Of The Drought”
Synonyms: Repercussions, After-Effects.
26) Anomaly
Meaning: Something That Deviates From What Is Standard, Normal, Or Expected.
Example: “There Are A Number Of Anomalies In The Present System”
Synonyms: Oddity, Peculiarity.
27) Roiled
Meaning: Make (Someone) Annoyed Or Irritated.
Example: “He Has Been Roiled By Suggestions That His Arsenal Future Is In Doubt”
Synonyms: Irritate, Annoy.
28) Beleaguered
Meaning: Put In A Very Difficult Situation.
Example: “The Board Is Supporting The Beleaguered Director”
Synonyms: Hard-Pressed, Troubled.