Sending a strong signal to bank defaulters, Union Finance Minister Arun Jaitley said here on Saturday they had to make sure that the debt was serviced.
“I think one thing is very clear here that the old regime by which the creditor would get tired chasing the debtor to have some recovery is over,” Mr. Jaitley said at a seminar organised by the CII on insolvency and bankruptcy.
Insolvency proceeding
“If a debtor has to survive, he has to service his debt or he has to make way for somebody else. This is the only correct way by which businesses will be done and this message has to go loud and clear to all,” he said.
Banks have started insolvency proceeding against several defaulters including the top 12 ones, following a direction from the RBI. These 12 constitute 25% of the system NPA and each of them has an exposure of ₹5,000 crores or more.
The Minister said the new Insolvency and Bankruptcy Code (IBC), 2016 was necessitated by the failure of the debt recovery tribunals to effectively perform their duty after the initial success.
He said the government was taking special measures to strengthen the infrastructure of the National Company Law Tribunal (NCLT).
“I think now that the law has been put in place, the competent authority, the NCLT has been constituted, we are taking special effort to make sure the infrastructure is there and is also strengthened,” he said.
He said it was important to stick to the timeline for resolving stress. “Speed really will help in effective implementation,” he added.
