Bank stocks gain after reports govt introduces bankruptcy bill in Lok Sabha

Thirteen bank stocks rose 0.13% to 3.32% at 15:30 IST on BSE after reports that the government today, 21 December 2015, introduced bankruptcy bill in Lok Sabha.

Meanwhile, the S&P BSE Sensex rose 217.89 points or 0.85% at 25,737.11.

Bank stocks gained. Among public sector banks, Bank of Baroda (up 0.13%), Punjab National Bank (up 0.45%), Bank of India (up 0.6%), State Bank of India (SBI) (up 1.63%), Union Bank of India (up 1.83%), and Canara Bank (up 0.54%) edged lower.

Among private sector banks, Axis Bank (up 2.34%), HDFC Bank (up 0.3%), ICICI Bank (up 3.32%), Kotak Mahindra Bank (up 0.63%), Federal Bank (up 2.18%), Yes Bank (up 0.33%), and IndusInd Bank (up 1.83%) edged higher.

Once enacted, not only will bankruptcy bill improve ease of doing business in India, it will also ensure better debt recovery for creditors, report said. The bill will reportedly consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interest of all the stakeholders including alteration in the order of priority of payment of government dues and to establish an Insolvency and Bankruptcy Fund

The bankruptcy bill was tabled in Lok Sabha by finance minister Arun Jaitley as the government plans to go ahead with its reform agenda despite goods & service tax (GST) setback. The bill will make it easier for sick companies to either wind up their businesses or engineer a turnaround. Called the Insolvency and Bankruptcy Code 2015, it will replace the existing bankruptcy laws and also simplify investors' exit.

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