Finance Minister Arun Jaitley on Monday introduced a Bill in the Lok Sabha to replace the NPA ordinance promulgated on May 7 this year.
The Banking Regulation (Amendment) Bill 2017 will amend the Banking Regulation Act 1949 for this purpose.
The Insolvency and Bankruptcy Code (Amendment) Bill, 2017 seeks to replace an ordinance which was promulgated in November to prevent unscrupulous persons from misusing or vitiating the provisions of the IBC.
The Insolvency and Bankruptcy Code (IBC) was enacted last year to consolidate and amend laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.
NPA ordinance had conferred powers on the Centre for authorising the Reserve Bank of India to issue directions to banks to initiate insolvency resolution process in respect of a default, under the Insolvency and Bankruptcy Code 2016.
According to the statement of objects and reasons of the bill introduced by Jaitley, the amendment "provides clarity as to the persons who can submit resolution plan in response to an invitation made by the resolution professional".
The amendment bill also makes certain persons ineligible for being a resolution applicant.
The ineligible persons or entities will include, undischarged insolvent, willful defaulter, and those whose accounts have been classified as non-performing asset.
Moreover, this may undermine the process laid down in the IBC as "unscrupulous person would be seen to be rewarded at the expense of creditors"
Meanwhile, P Radhakrishnan, Minister of State for Road Transport and Highways, on Monday introduced a Bill in the Lok Sabha for the development and maintenance of national waterways.
