Govt clears Bankruptcy Law: Jaitley
The Dollar Business Bureau
The Bankruptcy Law has been passed by the Joint Parliament Standing Committee, and is expected to be discussed in the current budget session of the Parliament, Finance Minister Arun Jaitley said on Wednesday.
Speaking at the second meeting of the MoF’s Consultative Committee, Jaitley said the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) and the Debts Recovery Tribunal Act (DRT) have also been amended to make the recovery process efficient.
Giving out further information on this announcement, the Finance minister said the government has taken an array of measures to deal with the Non Performing Assets (NPAs) in the banking sector, especially in the case of public sector banks (PSBs).
The Ministry of Finance has taken necessary steps to deal with defaulters who have been unable to pay due to the existing economic slump everywhere, and those who are willful defaulters including credit approved without a bank’s due diligence.
“In order to deal with default due to economic slowdown, the government has taken various measures to revive the stressed sectors which mainly include steel, textiles, power and roads among others,” the Finance Minister said.
Against these backgrounds, Jaitley pointed out that the government had completed recapitalisation of banks by giving Rs. 25,000 crore in the last year’s Union Budget 2015-16 as well as in 2016-17.
“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 and RDDB & FI Act,” the Finance Minister said.
“A direction to this effect has been issued to the banks last month,” he said.