Lok Sabha Passes the Insolvency and Bankruptcy Code Bill 2016 Thursday May 05,2016

The Lok Sabha on Thursday May 05,2016 passed the Insolvency and Bankruptcy Code Bill 2016, which is seen as a “transformational” legislation that will help improve India’s ranking in the World Bank’s ‘Ease of Doing Business’ index.

Replying to the discussion on this Bill, Jayant Sinha, Minister of State for Finance, told the Lok Sabha that the Government had “in toto” accepted the report of the Joint Committee of Parliament that went into the Insolvency and Bankruptcy Code Bill. 

Wilful defaulters

Minister of State for Finance Jayant Sinha highlighted that proceedings against ‘wilful defaulter’ will be independent of bankruptcy. The process of action against ‘wilful defaulter’ will be “criminal” action, he said. 

He said that wilful defaulters (in the banking system) are being identified and as on date over 7,000 such defaulters have already been identified.

A wilful defaulter is one who does not pay back bank loans and also siphons off funds advanced by banks to deploy them for other uses.