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Business EconomyPosted at: Aug 19 2017 8:20PM


ebtor has to service his debt or make way for somebody else: FM Jaitley

Mumbai, Aug 19 (UNI) Stating that the Insolvency and Bankruptcy Code (IBC) has reversed the relationship between debtor and creditor, Union Finance Minister Arun Jaitley today said the old regime by which the creditor would get tired chasing the debtor and end up getting nothing, is now over.
Addressing a national conference on the 'Insolvency and Bankruptcy: Changing Paradigm' organized by Ministry of Corporate Affairs (MCA), National Foundation for Corporate Governance (NFCG) and Insolvency and Bankruptcy Board of India (IBBI) here, he recalled, "For years, we lived in a system which allowed debtors to allow their assets to be rusted."
The Finance Minister said that while the framework has been laid down in the IBC, the practices that follow have to ensure that the timelines are followed and the objectives behind enacting the law are achieved.
Emphasising the need for adhering to timelines to make the code effective, Mr Jaitley said that it is extremely important that these timelines are adhered to by all the stakeholders.
Noting that the intent of the IBC is not the liquidation of assets but to preserve their value, either through existing promoters or through bringing in new promoters or partners, he said that in case the debtor fails to service his debt on time, he has to make way for somebody else.
He assured that special efforts are being made to ensure that the infrastructure requirements of various institutions under the IBC are in consonance with the requirements of this particular law.
"Now that the law is put in place and the competent authority NCLT (National Company Law Tribunal) has been constituted, we are making special efforts to make sure that the infrastructure is strengthened and brought in consonance with the requirements of this particular law," Mr Jaitley said adding, "Over a period of time, we
have to see, what improvements in the law are required to make sure that the purpose for which it has been created is subserved."
The Finance Minister also pointed out that 9-10 months would be too short time for the jurisprudence around a new law like the IBC to evolve.
The Government is, however, open to receive suggestions for improving the law in order to meet the purpose for which it was enacted, he stated.
Speaking earlier, Dr Urjit Patel, Governor, Reserve Bank of India (RBI), said that RBI has put in place new guidelines for banks and new systems and processes for implementation of the Code effectively.
He also said that the early results on the implementation of the law are encouraging.
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