Thursday, January 18News That Matters

Lok Sabha passes ‘The Insolvency and Bankruptcy Code (Amendment) Bill, 2017’

Loan defaulters can participate in bidding under the insolvency proceedings after paying due interest and making their bad loan accounts operational, Finance Minister Arun Jaitley said.

The government cannot allow loan defaulters to “merrily walk back” by paying a fraction of the due amount, he said while replying to a debate in the Lok Sabha on the Insolvency and Bankruptcy Code Amendment Bill, 2017, which was later passed by a voice vote.

 The bill seeks to replace an ordinance which was promulgated in November to prevent unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code (IBC).

The ineligible persons or entities will include undischarged insolvent, wilful defaulter and those whose accounts have been classified as non-performing asset.

These persons, however, can become “eligible to submit a resolution plan” if they clear all the overdue amounts with interest and other charges relating to their NPA accounts.

Those defaulters who had participated in the insolvency proceedings before November 23 can also bid for stressed assets provided they clear their dues in a month.

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