Toxic assets: Soon, ordinance to block defaulters from bidding

Lenders, IRPs want upfront payment before auction

The government is taking steps to disallow defaulters from bidding for toxic assets by amending the insolvency law and, at the same time, asking all bidders to make an upfront payment with their resolution proposals.

According to a top source in the government, the Ministry of Corporate Affairs will move a Cabinet note as early as next week, seeking to insert an additional section in the Insolvency and Bankruptcy Code (IBC) and amend a few other existing sections to bring in rules for promoters to bid for their companies.

The ordinance has been necessitated as the government thinks that by allowing existing