loan defaulters can participate in bidding under the insolvency proceedings after paying due interest and making their bad loan accounts operational, Finance Minister Arun Jaitley said on Friday.
The government cannot allow loan defaulters to “merrily walk back” by paying a fraction of the due amount, he said while replying to a debate in the lok Sabha on the Insolvency and Bankruptcy Code Amendment Bill, 2017, which was later passed by a voice vote.
The bill seeks to replace an ordinance which was promulgated in November to prevent unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code (IBC).
The ineligible persons or entities will include undischarged insolvent, wilful defaulter and those whose accounts have been classified as non-performing asset.
These persons, however, can become “eligible to submit a resolution plan” if they clear all the overdue amounts with interest and other charges relating to their NPA accounts.
Those defaulters who had participated in the insolvency proceedings before November 23 can also bid for stressed assets provided they clear their dues in a month.
Taking a dig at Congress member Gaurav Gogoi, the minister said that NPA was a “legacy problem” and was mainly on account of the reckless lending undertaken by the banks during the erstwhile UPA regime.
Gogoi had said that NPAs, which were low during the UPA regime, have escalated during the rule of the present government.
Responding to him, Jaitley said, “But I am sorry that Gogoi has still not take cognisance of what the problem is. How did this problem of NPAs happen in such a big magnitudeIJ Gogoiji has studied in good educational institutions of the world and he must have many times heard of the proverb that there were three types of lies — lies, damned lies and statistics. Today he has himself become a victim of the third one,” he said.