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Vinod Dua is back, to spread misinformation on FRDI Bill

That Mr Vinod Dua lies, is no longer shocking. We first saw how Mr Dua managed to squeeze seven half-truths and whole lies (actually eight), in one single video. We then deep-dived into his videos to unearth many more lies he has spread. In his latest video, Mr Dua does not disappoint.

Dua talks about the much-hyped FRDI Bill. We had done 2 fact-check pieces on the fear-mongering. Subsequently other finance sites have agreed. The government too put out huge advertisements to clear the doubts emanating from dooms-day reports. Mr Dua though is maybe living under a rock or is being deliberately economical with the facts.

Before coming to FRDI, Dua makes his patent claim on demonetization: that this scheme has allowed tax evaders to “legitimise” black money, by allowing them to deposit the same in the bank. May be he should tell this to the 18 lakh odd depositors who got contacted by the Income Tax Department under Operation Clean Money. Or to the 1.16 lakh od depositors who have received notices from the Income Tax Department based on their demonetisation data. Maybe the words of a MA in literature, will have more bearing than that of the tax department.

After the above potshots, Dua moves to FRDI Bill. He claims that via the new FRDI Bill, money in savings accounts upto Rs 1 lac will be insured, but the depositor will not have any right over the amount above that limit. He adds that, banks will have right on this money over and above Rs 1 lakh, and that this money, will be used by banks, to give as loan to companies whose businesses are collapsing.

First of all, the FRDI Bill does not specify the insurance limit. As explained earlier, the Rs 1 lac insurance is as per the DICGC Act, which will stand repealed once the FRDI Bill comes into force. So there is no question of this Rs 1 lac cover being brought in by the FRDI Bill.

This insurance limit of Rs 1 lac was fixed 24 years ago in 1993. Prior to this, the insurance amount was set at a measly Rs 1500 in 1961. The insurance amount increased by 66 times over 32 years. Source based reports in media suggest that this limit will be increased “substantially” via the new regulations. Common sense wise too, a revision after 24 years (going by past record) will be substantial.

Dua’s other claim that money over and above the insurance limit will be used to give to failed businesses too is patently wrong. The FRDI bill provides that such money will be converted into a long-term instrument which is still owed to the depositors. Later in the video, Dua himself mentions this. Then why did he first claim that this money will be given to failing businesses?

 

Again, as Dua later mentions that this money will converted into longer term instruments like Fixed Deposits, shares etc, why does he initially claim that depositors will have no right over this money? Why cannot Mr Dua be consistent with facts over a small 5 minute period?

In all of this, Dua does not mention that this “bail-in” clause comes into effect only if a bank fails. This is a crucial bit of information, which if revealed, then the agenda of fear-mongering fails. Is this why Mr Dua hides it? Instead he claims: “Iss waqt, aam aadmi ke paise saath, jo ek lakh ke upar hai, chhed chaad hone jaa rahi hai, bankon ke control mein aane jaa raha hai” (Now, the common man’s money, which is above Rs a lakh, will be tampered with, will come into the control of banks). This is plain fear mongering. If die to such comments, there is panic among depositors and they start withdrawing their money out of misplaced fear, causing liquidity crisis, will Mr Dua be ready to face criminal charges and jail time?

Also, Mr Dua fails to educate the viewers of the current (pre-FRDI bill) position, the position which was gifted to us by the Congress Governments of the past. Mr Dua likes to allocate credit of current missile launches to Nehru, but fails in highlighting what Nehru or his progeny have gifted to bank depositors.

Today if a bank goes bust, a depositor gets nothing over and above the insurance limit (of Rs 1 lakh). But in case a bank goes bust in FRDI bill regime, the depositor gets the insurance amount (unspecified) and the balance gets converted into a longer term instrument (i.e. money is not lost). The contrast is clear. The depositor at least can stake claim over his money once the FRDI Bill (in its current form) comes. Unlike the past where he has to say goodbye to anything above Rs 1 lac. Has Mr Dua not been educated on this?

The video ends with a grim message: That this 5 minute bit was a curtain raiser and Mr Dua armed with his MA in literature degree, will come back to guide us on financial bills. We hope someone tells him: We are watching.

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