NEW DELHI: The Narendra Modi government inched closer to yet another reform as the Joint Parliamentary Committee gave a green signal to the Bankruptcy Bill paving the way for its discussion in the current Budget session of Parliament.
The much-awaited Insolvency and Bankruptcy Code, which was introduced by Finance Minister Arun Jaitley in Lok Sabha in December 2015, aims to speed up liquidation of ailing firms, improve the ease of doing business and attract more investment. The Code will help Indian companies to exit an ailing business while banks stand to gain as they can recover their dues within a stipulated time.
Addressing the second meeting of the Consultative Committee on non-performing assets, Jaitley said the government is taking various steps, including introduction of Bankruptcy Law in the Lok Sabha, to deal with the problem of mounting bad loans.
The government has taken various measures to revive the stressed sectors which mainly include steel, textiles, power and roads among others. He said that the government has also done recapitalisation of banks by providing Rs 25,000 crore in the Union Budget 2015-16 as well as in this year’s budget 2016-17.
Jaitley said that wherever it was observed that number of cases in which action taken by the banks against guarantors for recovery of defaulted loans is insufficient, the government has advised the banks to take action against guarantors in the event of default by borrowers under relevant sections of SARFAESI Act, Indian Contract Act.
Members suggested that there is need for bringing more transparency in the system and list of all defaulters whose loans have been written off by the PSBs be made public and they asked for exemplary action against the wilful defaulters so that others do not indulge in similar activities.
Members also suggested that there should be no employment cut due to any amalgamation or merger of banks. Members who participated in the meeting included Anirudhan Sampath, Baijayanta Jai Panda, Dilip Kumar Mansukhlal Gandhi, Kailkesh Narayan Singh Deo, Poonam Mahajan, Ram Charitra Nishad, Supriya Sadanand Sule, Anil Desai, Digvijaya Singh, Satish Chandra Misra and Kumari Selja.