Committee Clears Bankruptcy Law

Committee Clears Bankruptcy Law

Budget session will now discuss proposed legislation dealing with wilful defaulters

A joint Parliament standing committee has cleared the proposed bankruptcy law and it's likely to be discussed in the ongoing budget session of Parliament, finance minister Arun Jaitley has said.

Addressing the second meeting of the consultative committee on `NPAs in banking sector' on Wednesday, Jaitley said the government had taken steps to deal with both wilful defaulters and those in trouble due to economic slowdown, according to a statement issued by the finance ministry.

The finance minister also said that SARFAESI Act and DRT Act have been amended to make the recovery process more efficient and expedient.

The SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act and Debt Recovery Tribunal (DRT) Act have also been amended to make the recovery process more efficient and expedient, Jaitley said in his opening remark. He also told the committee that the government has advised 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 after finding that in number of cases insufficient action has been taken against guarantors.

The government has taken various measures to revive stressed sectors such as steel, textiles, power and roads, he said.

The finance minister said Rs.25,000 crore was provided for bank capitalisation last year and similar amount has been budgeted this year. He also listed the measures to make bank management professional and given full autonomy in commercial decisions without any interference from the government. 

The Economic Times, New Delhi, 28 April 2016