Lok Sabha passes amendment in Bankruptcy code
IBC was introduced in 2016, with an aim to find a time-bound resolution on companies that have become insolvent and to protect the interest of creditors.
The much-awaited Insolvency & Bankruptcy Code (Amendment) Bill which will tighten norms on willful defaulters, was passed by Lok Sabha.
Amendment in IBC, excludes willful defaulters and existing promoters from bidding to purchase stressed asset of companies, which are under going insolvency proceedings.
Union Finance Minister Arun Jaitley during the discussion on IBC, said, "The government cannot allow loan defaulters to merrily walk back by just paying a fraction of the amount due."
Responding to a question raised by Premachandran, Jaitley said, "The ordinance is necessary, because this act itself provides a 180 days time period in which a resolution is needed to be completed."
Jaitley said,"There are 12 cases referred by the Reserve Bank of India, but there are cases which either the promoters themselves have gone and presented a resolution plan. There are cases where creditors have filed application. So there are numerous cases pending and the law will be applied to all of them."
Click Here to get an overview of the entire IBC bill passed by Lok Sabha.
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