Bifr Is Dead, Long Live Bru

It may be a bit too early for bankers to celebrate their victory against rogue borrowers. The Board for Industrial and Financial Reconstruction (BIFR) may have lost its teeth but defaulters can still take shelter under the Bombay Relief Undertakings (Special Provisions) Act, 1958, (BRU) or equivalent laws in other states.

Indeed, defaulting companies that do not wish to come to the negotiating table with bankers to pay their dues are suddenly rushing to the BRU.

According to sources, ever since the Securitisation Bill was passed by Parliament, companies in Gujarat, Maharashtra, Rajasthan and Karnataka are rushing to seek shelter under the BRU Act, the RRU (Rajasthan Relief Undertakings) Act and the KRU (Karnataka Relief Undertakings) Act.

 

BRU was enacted in 1958 and so covers both Maharashtra as well as Gujarat.