Govt Working on FRDI Bill, Simplifying Taxes, Says FM Sitharaman

Nirmala Sitharaman is likely to visit China in late April.

(Photo: PTI)

The government is working on the contentious Financial Resolution and Deposit Insurance (FRDI) Bill but not sure when it will be tabled in the house, news agency PTI quoted Finance Minister Nirmala Sitharaman as saying, on Friday, 7 February.

The comments assume importance given the massive five-fold hike in deposit insurance and the recent changes in the insolvency laws that included insolvency solutions for financial institutions.

"We are working on the FRDI Bill but not sure when it can get through the House," the minister said, addressing a press conference in Mumbai, following a session on the recently presented Budget.

The FRDI Bill seeks to offer a bail-in clause to banks, which many fear will be detrimental to depositors.

'Middle Class Will Pay Tax at Lower Rate'

The finance minister also reiterated that the announcement in the Budget to tweak the rules related to dividend distribution tax (DDT), will aid the middle class.

A report by The Indian Express quoted the finance minister as suggesting that a large section of the middle class will pay tax on dividends at a lower rate and will thus have more money at their disposal.

Sitharaman further said that the government is moving towards the simplification of tax regime, according to The Indian Express.

FM Hails RBI Move

The finance minister welcomed the liquidity measures announced by the Reserve Bank of India (RBI) for retail customers in general and for MSMEs and realty players in particular at the monetary policy review on Thursday.

"I am grateful and happy... the Reserve Bank of India is in lockstep with the government," she said, referring to the central bank's decision to allow banks to do away with the need to set aside extra cash reserves.

The RBI, in its review, has tweaked the cash reserve ratio (CRR) norms in order to promote credit growth in MSME and auto sector.

CRR is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.