House joint committee clears bankruptcy code

FM Arun Jaitley also said that various measures had been taken to deal with the issue of NPAs in banking sector

The joint committee on Insolvency and Bankruptcy Code, 2015, has submitted its report, which will be tabled in Parliament on Friday. The report, according to its members, has been submitted without any dissenting notes, with the government accommodating all the amendments moved by members of opposition parties.

The 29 members of the committee, headed by Bhupender Yadav of the Bharatiya Janata Party (BJP), interacted with a cross-section of stakeholders. It consulted industry chambers and trade unions as well. The committee also discussed some of the recent cases such as industrialist Vijay Mallya and the chit fund scams. The last meeting of the committee was held on Tuesday.

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“All of us members, including those from smaller political parties, are satisfied with the formulation of our recommendations. We believe that the Bill should be passed in the current session of Parliament,” a committee member, who didn’t wish to be named, said. Members of the committee included Akali Dal’s Naresh Gujral, Communist Party of India (Marxist)’s Jitendra Chaudhury, Biju Janata Dal’s Bhartruhari Mahtab, KC Venugopal of the Congress, BJP’s Sanjay Jaiswal and Gajendra Shekhawat.

Finance Minister Arun Jaitley, addressing the second meeting of the consultative committee on non-performing assets (NPAs) on Wednesday, said the bankruptcy and insolvency code was likely to be discussed in the current session of Parliament now that the joint committee has submitted its report.

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.

Jaitley said 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 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 NPAs in the banking sector, especially in the case of public sector banks.