Barring wilful defaulters from acquiring bankrupt company will bring credit discipline: Bankers

MUMBAI: The move to bar wilful defaulters from regaining control over their companies will bring credit discipline and prevent promoters from gaming the system, senior bankers said.
After an intense debate about whether the Insolvency and Bankruptcy Code prevents or encourages those who defrauded the banking industry, the government on Wednesday proposed an ordinance that would bar `wilful defaulters’ from bidding for assets in the bankruptcy courts. The Reserve Bank of India defines a wilful defaulter as one who had the ability to pay up, but did not, and other factors including diversion of funds.

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