NEW DELHI (Reuters) - India’s cabinet on Wednesday approved amendments to the Insolvency and Bankruptcy Code, the finance minister said, changes that are designed to prevent wilful defaulters from bidding for stressed assets.
Finance Minister Arun Jaitley announced approval for the amendments following a cabinet meeting but did not provide details. Local media has widely reported that the amendments will stop wilful defaulters from buying stressed assets that they previously owned.
The government is striving to cut a record $147 billion of soured loans accumulated in the banking sector by making it easier to force companies into insolvency.
Under Indian law, wilful defaulters are classified as firms or individuals who own large businesses and deliberately avoid repayments.
The finance ministry has already asked banks to ensure that wilful defaulters are prevented from buying back assets.
Reporting by Manoj Kumar; Writing by Tommy Wilkes; Editing by Malini Menon and Jacqueline Wong