NEW DELHI — Dismissing rumors that new legislation will harm depositors’ interest, Prime Minister Narendra Modi said money is completely safe in the bank and interests won't be allowed to be affected in any way.
Addressing the Federation of Indian Chambers of Commerce and Industry annual general meeting, he said certain sections were spreading rumors that depositors would suffer under provisions of the proposed Financial Regulation and Deposit Insurance Bill.
"...the government is constantly taking steps to strengthen the banking system. The interest of the banks will be secure, the interest of the customers will be secure, then the interest of the country will also be safe," Modi said.
"In such a big role of institutions like FICCI, it is also with the right information to make the industry and people aware. Now, for the past few days rumors are being spread about the FRDI bill. The government is working to secure the interest of the customers, in order to safeguard the interests of the customers, but the news is being played in the opposite direction," he added.
Modi was apparently referring to the controversy over a bail-in provision in the FRDI Bill, under which banks will be allowed to forfeit major portions of account holders’ deposits in the event of a crisis in the financial institution.
The prime minister said the United Progressive Alliance government had completely spoiled the banking system. The biggest liability passed on by the previous government were the non-performing assets, he said.
"Nowadays, the non-performing assets, the NPA-NPA attack, is the biggest liability given to this government, of economists sitting in the previous government."
Modi said the last government had put pressure on banks and forced them to lend to influential people, which further led to NPAs.
"The people in the previous government knew, the bank knew, the industry was also aware, the market-related institutions also knew that this was going wrong. It was the biggest scam of the UPA Government. Commonwealth, 2G, coal, bigger scandal than all these. It was a kind of robbery of the public's earning by people sitting in the government through industrialists."
He said his government was working to create a system that was transparent and sensitive.
Talking about the Goods and Services Tax, Modi said the government's effort was to ensure that all eligible businesses register for GST. "The more formal the system becomes, the more it will benefit the poor. It will enable easier availability of credit from the banks, and reduce cost of logistics, thereby enhancing competitiveness of businesses."
Modi recalled that around the time of FICCI's founding in 1927, Indian industries had united against the Simon Commission. He said Indian industries had joined all other sections of Indian society for the national interest, then.
He said a "similar atmosphere" exists today and people are working to fulfill their responsibilities towards the nation. Modi said the hopes and aspirations of the people are to rid the country of internal problems such as corruption and black money.