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Bankruptcy law has to be considerate towards MSMEs: Goyal

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Press Trust of India New Delhi
There is a need to be considerate towards small and medium enterprises within the bankruptcy resolution framework as a more liberal approach is required to deal with their issues, Union minister Piyush Goyal said today.
"We have to be more considerate about small and medium industries. We have to look at the impact that a large problem has on a series of ancillaries or customers of a large NPA problem in a more liberal or practical approach and I am sure the people looking at this must be consciously addressing this," the railway minister said.
Small and medium industries do deserve a little more liberal and operationally viable approach, he said at the India Economic Conclave here.
A high-level panel looking into various aspects of the insolvency law has submitted its report to the government.
Speaking about the Insolvency and Bankruptcy Code (IBC), ICICI Bank CEO Chanda Kochhar said she is very optimistic about the new law for resolution in a time bound manner.
"As far as IBC is concerned, that's one of the most important events that happened in the country. That has actually given power of balance back in the hands of the banks. Now its really a worry for the promoters to say let me not make a default...that's very positive impact going forward," she said.
About solving existing cases through IBC, she said it puts time bound approach in the resolution process in addition to providing judicial cover to the bankers.
Goyal further said the processes set up by the government are clean, honest and transparent and there is absolutely no problem of funds when one executes a project honestly.
I believe one can very easily work out projects which are economically viable. They give you a good cost benefit ratio, and for any project which makes good sense, whether it is for customer satisfaction or capacity enhancement or for efficiency in operations, I believe one can easily work out a business case, he said.

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First Published: Mar 29 2018 | 6:40 PM IST

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