How the Insolvency and Bankruptcy Code, 2016 and Financial Resolution and Deposit Insurance Bill together make difference in the life of a common man? How they would affect public policy in financial matters? Critically discuss.

The new Financial Resolution and Deposit Insurance Bill-2017 seeks to create a frame work for resolving bankruptcy in financial firms such as banks and insurance companies and also aims to instill discipline in financial service providers in the event of a financial crisis by limiting the use of public money to bail out distressed entities.  The Insolvency and Bankruptcy Code, 2016 can make credit cheaper, its sources wider and engender corporate accountability. Strengthening the rights of creditors (even perhaps at the expense of debtors) can reduce the cost of credit and increase access to credit for the entire economy.
Both of these legislations would boost investor confidence and will lead to greater formalization of Indian Economy. However, as regards to the Financial Resolution and Deposit Insurance Bill, one becomes an act has a bail-in provision which has / will generate lots of anxiety among the common people.

Topics: GS-III: Indian Economy Issues Relating to Planning