The Lok Sabha passed the Insolvency and Bankruptcy Bill on Thursday. The proposed amendments of the Insolvency and Bankruptcy Code Bill were discussed in the Lok Sabha.
Gourav Gogoi, a member of Congress and son of current Assam Chief Minister Tarun Gogoi informed the parliament that the current bad loans in the country amount to Rs 71,000 crores. The Insolvency and Bankruptcy Bill will implement a single bankruptcy code and set deadlines for processing insolvency cases.
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Speaking at a Finance Minister, meeting of a parliamentary committee Arun Jaitley said that the law is among the various steps that the government is taking to deal with the problem of mounting bad loans of state-run banks.
Jaitley added that there are two categories of defaulters: those unable to pay back and willful defaulters.The government will deal with both these categories with various measures.
Bill To Provide Uniformity to Bankruptcy Laws
The Bill will enact a single bankruptcy code and set deadlines for processing insolvency cases.
The law aims to reduce delays in the resolution of insolvency cases and improve recoveries of money lent to companies. The draft bill has proposed a timeline of 180 days, extendable by 90 more days, to resolve bankruptcy cases.
A systemic vacuum exists with regard to bankruptcy situations in financial firms. A comprehensive Code on the Resolution of Financial Firms will be introduced as a bill in parliament during 2016-17. The code, together with the Insolvency and Bankruptcy Code of 2015, when enacted, will provide a comprehensive resolution mechanism for our economyArun Jaitley, Union Minister for Finance
The code will provide specialised resolution mechanism to deal with bankruptcy situations in banks, insurance companies and financial sector entities.
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