Allow promoters to bid under IBC if not willful defaulters: CII

The government has prohibited promoters of loan-defaulting companies from bidding under the insolvency process citing ethical reasons.

Published: 26th April 2018 03:49 PM  |   Last Updated: 26th April 2018 03:49 PM   |  A+A-

By PTI

NEW DELHI: Promoters of stressed assets should be allowed to bid under the Insolvency and Bankruptcy Code in case they are not willful defaulters and the company has suffered on account of sectoral reasons, CII President Rakesh Bharti Mittal said today.

The government has prohibited promoters of loan-defaulting companies from bidding under the insolvency process citing ethical reasons.

"Where there is no willful default or fraud, my view is that the promoter should be given a chance (to bid) if the loan default is due to stress in the sector," the new CII president told PTI.

He further said the government is seriously considering this issue "but we have to see what finally comes out".

Terming the rising non-performing assets (NPAs) as serious problem, Mittal said if it is because of the willful default, the government should take a strict action.

However, if the NPAs are on account of stress in the sector, there is a need to address the problem in an amicable manner in which bankers would have to take hair cut.

Mittal also made a strong case for reducing interest rates by 100 basis points or 1 per cent to help the industry which is reeling under the burden of high interest rates. He suggested that the RBI should do away with the provision of one-day default for recognising NPA as it was a too "harsh". Non-performing assets in the banking sector were over Rs 8. 31 lakh crore at the end of December 2017.

Replying to a question on taxing farm income, the new president said that the government could consider imposing income tax on large farmers.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

facebook twitter whatsapp