The Rajya Sabha unanimously passed two crucial financial legislations on Monday — the Banning of Unregulated Deposit Schemes Bill and the amendments to the Insolvency and Bankruptcy Code (IBC). While the first Bill is to curb illegal ponzi schemes, the second Bill, which will have to be cleared by the Lok Sabha also, eases the process of corporate restructuring and removes ambiguities in the three-year-old law.

Replying to a debate on the IBC amendments, Finance Minister Nirmala Sitharaman said the government will not make any other claims after the process of a resolution. She also clarified that no criminal proceedings will be initiated against a successful resolution applicant and assured the members that amendments give protection to new bidders. Sitharaman said the amendments were necessitated by the country’s entry into a new territory after the implementation of the IBC. She said this was the third amendment of the Act and overall 54 clauses were amended by Parliament in the last three years. Justifying the time-limit set for the resolution process for the courts, she said even the Supreme Court wanted simplified legislations on economic matters.

‘Opposition disagrees’

Opposition member Kapil Sibal had said in his speech that the provision of setting a 330-day limit for the process will not stand in a court of law. Citing the percentage of ‘haircut’ in many cases of resolution, he said big companies were the beneficiaries of the process.

CPI MP Benoy Vishwam accused that the Bill is a conspiracy between the government, corporates and the bureaucracy and the lone beneficiaries of the amendments will be the corporate houses.

Citing the examples of huge benefits to companies such as Vedanta, JSW and Reliance, Sibal said the Centre is creating an oligopoly. “You have a few players in this country because nobody else has the capital to buy off these assets. The only entities that have the capital are the big players, and we know who they are. So, those four or five big players are buying the precious silver of this country at throw away prices. That is your great resolution process,” he said.

The BJP members retorted that the amendment will not only help the companies with a new life but it will also stand with the workers. They also argued that the amendments are particularly in the interest of home buyers, who have been let down by real estate investors.

Sitharaman, in her opening remarks, said the Centre is not leaving anything open-ended.“We are not giving more time, and, therefore, are bringing clarity in terms of the time-bound decisions that are essential to keep the legislative intent. So, in a way, the Code is also being monitored by a Central Government Expert Committee and amendments which are being made are made after due stakeholder consultations,” she said.

Related Topics
comment COMMENT NOW