Bankruptcy Law cleared by Joint Parliament Standing Committee: Arun Jaitley
Jaitley said the government is taking various steps, including introduction of Bankruptcy Law in the Lok Sabha
Finance Minister Arun Jaitley on Tuesday said the Joint Parliament Standing Committee has cleared the Bankruptcy and Insolvency Code and is likely to be discussed in the current Budget Session of Parliament.
Addressing the second meeting of the Consultative Committee on 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.
The Finance Minister 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 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.
He further said that a direction to this effect has been issued to banks last month.
The government, Jaitley said, has taken various measures to deal with the issue of non-performing assets (NPAs) in banking sector especially in case of public sector banks (PSBs).
Citing that there are two categories of defaulters, namely 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, he said various measures are being taken to deal with both categories of defaulters.
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, he said.
Government has also done recapitalisation of banks by providing Rs 25,000 crore in the last year Union Budget 2015-16 as well as in this year's budget 2016-17, he said.
He further said transparency and professionalism has been brought in appointment process for top management positions in the PSBs including Chairmen and Managing Directors.
The Government has taken various measures to make the management professional, has given full autonomy to the banks in taking commercial decisions without any interference from the government, he added.