The Joint Parliament Standing Committee has cleared the Bankruptcy and Insolvency Code and it is likely to be discussed in the ongoing Budget Session of Parliament, finance minister Arun Jaitley said while addressing the second meeting of the Consultative Committee on non-performing assets (NPAs).
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 Bankruptcy Law has been cleared by the Joint Parliament Standing Committee and the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act and Debt Recovery Tribunal (DRT) Act have been amended to make the recovery process more efficient and expedient, he said in his opening remark.
Listing two categories of defaulters, such as those who are unable to pay back due to economic slowdown both in domestic and global and other reasons outside their control as well as wilful defaulters, including loans sanctioned without due diligence by the banks, the finance minister said various measures are being taken to deal with both categories of defaulters.
The government has also taken various measures to revive stressed sectors including steel, textiles, power and roads among others in order to deal with default due to economic slowdown, he said. The government has done recapitalisation of banks by providing Rs 25,000 crore in last year’s Budget as well as in Budget for 2016-17, he said.
The government has also brought transparency and professionalism in the appointment process for top management positions in the PSBs including chairmen and managing directors, he added.
The members of the Consultative Committee gave their suggestions with regard to recovery of loans and bringing NPAs under control, adding that there is need for bring more transparency in the system and that list of all defaulters whose loans have been written off by the PSBs need to be made public. The members asked for exemplary action against the wilful defaulters so that others do not indulge in similar activities. They also asked the government to ensure level playing field to all Indian entrepreneurs so that due to wilful default by some prominent business men, others may not be considered and treated in a similar fashion.