New Delhi: The Lok Sabha on Thursday passed the Insolvency and Bankruptcy Code Bill, which makes it easier to act against the defaulters of loans.
Amid concerns expressed by members over rising instances of wilful defaults as highlighted by the case of liquor baron Vijay Mallya, minister of state for finance Jayant Sinha said that the bankruptcy framework and the normal procedure against them would continue in a parallel manner. He was replying to a debate on the Bill that seeks to update and consolidate existing laws.
The legislation is a “transformational building block” for the economy and there would be one law dealing with bankruptcy while doing away with at least 12 different legislations, some of which are centuries old. The new framework would help in improving India’s position in the World Bank’s ease of doing business ranking.
Touching upon various aspects of the legislation, the MoS finance said it would re-address the powers of borrowers and creditors as well as bring in more transparency in the bankruptcy process. As per this law, information utilities would be created to provide creditors with information about borrowers such as how much money has been borrowed.
