National
Creditors need to take haircut in resolving bankruptcy: Jaitley (Lead)
New Delhi, Dec 29 (IANS) 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 on the loan, Finance Minister Arun Jaitley said on Friday.
He was replying to the debate in the Lok Sabha on Friday after it passed the amendments to the Insolvency and Bankruptcy Code (IBC) which seek to plug potential loopholes in the Code and prohibit “certain persons”, such as wilful defaulters, from submitting resolution plans to let them take charge of the company.
“Workmen, creditors, banks, unsecured creditors..all need to take a haircut so there is an equitable distribution of the resolution process,” Jaitley said, noting that the government featured later in the “waterfall list” of creditors involved in the resolution of the non-performing assets (NPA), or bad loans, in the Indian banking system that have crossed the staggering level of Rs 8.5 lakh crore.
A haircut signifies accepting a lower than market value for the asset for a resolution of the NPA.
“However, you cannot have a situation where the promoters responsible for the NPAs in the first place come in through the back door to take over the company again…so it was necessary to have an ineligibility criteria,” he said.
Jaitley, who also holds the corporate affairs portfolio, further clarified that management is not barred from making a unit operational if it pays the outstanding interest on the stressed loan.
“No one is being debarred for life and neither are we asking that you pay the whole amount. Just pay the interest and make the account operational,” he said.
The Insolvency and Bankruptcy Code (Amendment) Bill, 2017 will replace an ordinance promulgated earlier. The IBC, being implemented by the Corporate Affairs Ministry, became operational in December 2016 and provides for a time-bound insolvency resolution process.
The changes proposed are expected to help streamline the process of selecting buyers for stressed assets.
For instance, currently the Code does not specify the type of buyers who can bid for stressed assets of companies that are undergoing bankruptcy proceedings.
Certain people prohibited from submitting the resolution plan include wilful defaulters, disqualified directors, promoters or management of the defaulting company or any person who has indulged in these activities abroad.
According to the American rating agency S&P-owned Crisil, Indian banks will need to take a “haircut” of up to 60 per cent on their bad loans to resolve the issue of NPAS, which is holding up higher economic growth.
The government has embarked on a two-pronged strategy in this regard.
On the one hand, it has brought in the Insolvency and Bankruptcy Code which provides for a time-bound insolvency resolution process. On the other hand, it has approved a Rs 2.11 lakh crore recapitalisation plan for state-run banks.
–IANS
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Lucknow: Vishal Singh, a renowned social worker from Lucknow, also known as Foodman, has once again made India proud. He was honored by the Happy Hands Gloves Cooperative Limited Company in Korathai, Thailand, for his work with the Hunger Free World Mission.
The Hunger Free World Mission’s meeting was held in Korathai, Thailand, under Vishal Singh’s leadership. Representatives from several countries, including Mr. Raja Dwivedi (Managing Director of Happy Hands Gloves Limited), Thailand Coordinator Mr. Raja Mishra, and member Mr. Varun Singh, attended the event.
Under Vishal Singh’s leadership, the attendees took a pledge to work together toward creating a hunger-free world.
Speaking on the occasion, Vishal Singh explained that the main goal of the Hunger Free World Mission is social participation. He said the mission is not just about feeding people but also about meeting other basic needs of those who are struggling. The mission focuses on helping families of terminally ill patients in hospitals by providing food and shelter. It also works to fulfill essential needs like education, jobs, and care for the elderly.
For the last 16 years, the Vijay Sri Foundation has been providing free services, benefiting thousands of people. Vishal Singh highlighted that the mission aims to gain global recognition like other organizations such as WHO, WWF, and Red Cross, which work for social causes.
During this meeting, Vishal Singh was appointed as the Chairman of the Hunger Free World Mission by representatives from various countries. They also discussed holding regular meetings in different countries to push the mission forward.
Business tycoon Dr. Abhishek Verma has also supported this humanitarian mission, vowing to promote the idea of “Seva Parmo Dharma” (Service is the highest duty) worldwide. Vishal Singh praised him, stating that people like Dr .Abhishek Verma inspire others to work for the betterment of society.
Recently, Romania’s Ambassador, Mr . Daniela Sezonov Ţane, invited Vishal Singh to the Romanian Embassy in Delhi, where they discussed the mission in detail. Impressed by his humanitarian work, she honored Vishal Singh and invited him to Romania to take the mission forward .
Food man Vishal Singh has been serving the people of India for the past 16 years. Through the Vijay Sri Foundation, he provides free meals to cancer patients & their families ,shelter, and education for women & children along with running free old-age homes in Lucknow.
In addition to his humanitarian work, Vishal Singh also addresses issues like crime and corruption through his role as Chairman of Seva Path Media and Managing Director of Vijay Sri Foundation.
During the COVID-19 pandemic, Vishal Singh and his team worked tirelessly to provide food and help to the needy, including starving children, elderly citizens, and pregnant women. Despite contracting the virus himself, he continued to assist others after his recovery. He even created a life-saving oxygen regulator using household items, which was praised by doctors both in India and abroad.
In his address at the meeting, Vishal Singh spoke about his mission to create a hunger-free world. He pointed out that India’s large population, along with issues like unemployment and poverty, has caused the country to fall on the Hunger Index. He urged people to contribute just one handful of grains daily to help create a hunger-free world.
He concluded by saying that through social participation, we can empower the people around us, meet their basic needs, and work together to build a stronger, more prosperous, and developed society.
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