Parlt passes Insolvency and Bankruptcy Bill

Source: The Hitavada      Date: 03 Jan 2018 09:07:43


 

NEW DELHI,

The Government has entered into an uncharted territory and would continue to modify the law, says Finance Minister Arun Jaitley Opposition asks the Govt to identify willful defaulters of bank loans


RAJYA Sabha on Tuesday passed the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017 Bill through a voice vote.
The Bill was passed by the Lok Sabha last week.
Finance Minister Arun Jaitley on Tuesday said, the Government has entered into an uncharted territory as far as bankruptcy and insolvency Code is concerned and would continue to modify the law dealing with the issue.


“Insolvency and bankruptcy is an area in which it is only in the recent years that we have chartered into. It is a learning experience,” the Minister said while winding up a debate on the Bill.


The Government, Jaitley said, has been encountering situations which were not anticipated earlier and assured the House that it would continue to take corrective action.
The Bill seeks to replace an Ordinance which was promulgated in November to prevent unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code (IBC).


The ineligible persons or entities will include undischarged insolvent, willful defaulter and those whose accounts have been classified as non-performing asset. These persons, however, can become “eligible to submit a resolution plan” if they clear all the overdue amounts with interest and other charges relating to their NPA accounts.


Those defaulters who had participated in the insolvency proceedings before November 23 can also bid for stressed assets provided they clear their dues in a month. Responding to the concerns of the members, he said the whole effort was to make banking sector robust and detach it from politics. “You need a strong banking system ...You need banks which are able to lend money to large industries, to infrastructure projects, to small industry, for educational loans. ...It is all part of the economy that you need a robust banking system,” he said.


Jaitley said during the insolvency process, banks and unsecured creditors will have to take some haircut and if the same management comes back, nothing would change.