Creditors must take haircuts to end bankruptcy: Arun Jaitley

Lok Sabha passes Insolvency and Bankruptcy Code Amendment Bill

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 (pictured) 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, later passed by voice vote.

Banks and creditors would need to take a “haircut” on their bad loans, even as defaulting promoters could make their businesses operational again by paying the outstanding interest