Many bigwigs who take crores of loans from banks and find thousands of ways to evade the dues are scared now. They are running after banks to repay their loans. The reason is the newly enacted Insolvency and Bankruptcy Code (IBC) by Central Government.
The government has amended the IBC to prohibit the promoters of companies to take part in the auctions conducted by National Company Law Tribunal(NCLT) when they are auctioning NPAs related to their companies. The new amendments in IBC suggest stringent action against the promoters who evade the repayment of bank loans. The promoters are now fear that they will lose control over the companies. These defaulters are trying to repay the bank loans now.
Ministry of Corporate Affairs has revealed that more than 2100 companies have cleared their outstanding amounts and it amounts to nearly Rs.83,000 crores. On the other hand, there is criticism from Corporate circles on the amendments to IBC. Several corporate biggies like Ruias(Essar Group), Singhals(Bhushan Group), Gaurs (JP Group) are having corporate default cases. Some people fear that the auctions will take a long time and their loans will not be recovered.
Government is giving a strong answer to the criticism that they have amended the IBC to make sure that the defaulters can't take the properties back by spending less amount. Government is also saying that it is allowing the promoters to take part in the auction if they repay their loan dues. On the whole, banks are happy with the amendments because it will increase responsibility among the company promoters.