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Bankruptcy Law Has House Panel Green Light, says FM

Jaitley, aims to speed up liquidation of ailing firms, improve the ease of doing business and attract more investment.

Published: 28th April 2016 06:39 AM  |   Last Updated: 28th April 2016 06:45 AM   |  A+A-

Jaitley visa PTI

Union Finance Minister Arun Jaitley speaks at Carnegie Endowment on the sidelines of 2016 Spring Summit of World Bank/International Monetary Fund in Washington DC on Wednesday. | PTI

NEW DELHI: The Narendra Modi government inched closer to yet another reform as the Joint Parliamentary Committee gave its green light 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 firms to exit an ailing business while banks stand to gain as they can recover their dues in 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 mounting NPAs.

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 Budget ’15-16 as well as in this year’s budget.

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 banks to take action against guarantors in the event of default by borrowers under 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. They  also suggested that there should be no employment cut due to merger of banks.

Anirudhan Sampath, Baijayanta Jai Panda, Dilip Kumar Mansukhlal Gandhi, Kailkesh Narayan Singh Deo, Ram Charitra Nishad, Supriya Sadanand Sule, Anil Desai, Digvijaya Singh, Satish Chandra Misra, Kumari Selja attended.

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