Bankruptcy Law cleared by the Joint Parliamentary Standing Committee

Finance Minister today announced that the bankruptcy and Insolvency code have been cleared by the Joint Parliamentary Standing Committee. In what can be termed as a step towards addressing the problem of NPAs (Non Performing Assets) plaguing the Banking sector in India, the announcement will generate lot of confidence amongst worried investors who have betted on sound banking growth story in India. Finance Minster Arun Jaitley suggested that the bankruptcy and insolvency code may be discussed in the current budget session of Parliament.

Arun Jaitley explained that there are two types of defaulters, mainly those who can be claimed as willful defaulters and others who are unable to repay loans due to problems in the industry or in the economy. Finance minister hinted at various measures being taken to address both categories of defaulters. Already measures are in place for appointment of senior level employees in PSB banks where the government interference is minimal and that PSB banks can take independent commercial decisions without  government interference, said Finance Minister.

It was further stressed by the Finance Minster that various steps have been taken to revive the sectors like Steel, Textile, Power and Roads where maximum clustering of NPAs is identified. Arun Jaitley mentioned, apart from directly taking steps to revive the sectors in trouble, the government has been capitalising the PSB banks as announced in the budget, in order to address the NPA problem faced by the banking system that is threatening to affect the GDP growth in our country.