New Delhi, Nov 23 - The ordinance to amend the insolvency and bankruptcy code that will bar defaulters from bidding for the stressed assets has got the President's approval.
President Ram Nath Kovind on November 23 signed the ordinance that was sent to him by the Union Cabinet on November 22.
Breaking the news at a meeting of select editors, Finance Minister Arun Jaitley said: "The ordinance disentitles the big defaulters and makes it difficult for them to bid for distressed assets which was of their own making."
He said the ordinance does not ban them from bidding for the stressed assets but would make it difficult for them and disentitles them from doing it.
Giving an example he said: "You can't say my account is NPA (non performing asset) but I have to bid. This is ethically completely unacceptable to the Indian political system.
"I also have a political cost to pay. You can't be a stressed asset and you want to join the process for bidding."
He said one solution could be that the NPA holder at least comes forward and services the interest by Rs 10 to Rs 15 -thousand crore in an asset of, say, Rs one lakh crore.
The Insolvency and Bankruptcy Code (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.