Finance Minister Arun Jaitley
on Saturday said debtors taking banks for granted was over with the introduction of the Insolvency and Bankruptcy Code
(IBC), but the judiciary would have to adhere to timelines to make the process truly effective.
“The message in the legislation is loud and clear: a debtor would certainly have to make sure that their debts are serviced,” Jaitley said. He added that IBC’s objective was to save the company concerned, rather than push it towards insolvency.
The new regulations are viewed by some as giving upper hand to lenders who are reeling under Rs 8 lakh crore of non-performing assets (NPAs) or bad loans.
PSU banks alone account for about 75 per cent of the total bad loans.
The FM also said, “If a debtor has to survive, he has to service his debt, or he has to make way for somebody else.”
Jaitley also said the judiciary should help in the process, as it was extremely important to adhere to the timelines. “Conventionally, Indian courts have always had two standards. When timelines are made for executives, they normally maintain these are binding. When timelines are made for judicial institutions, courts have conventionally held that these are only directives, he said.
The minister added, “I do hope these (timelines) remain as mandatory as possible and are adhered to. Speed really will help in effective implementation.”