Centre: Code on failing banks soon

Mumbai: The Centre will soon put out the draft code on resolution of distressed financial firms for discussion. The changes in the Insolvency and Bankruptcy code were approved earlier in May. “An experts’ committee is presently working in the department of economic affairs on a resolution mechanism to deal with bankruptcy in insurance companies, banks and financial sector entities,” said Dr Saurabh Garg, joint secretary, finance ministry, while inaugurating an Assocham Summit on Asset Reconstruction Companies (ARCs).

He said “may be soon we will be able to get the draft law which will be put out for discussions.” Besides, there is also information utility as all the financial information and data in terms of lending are all recorded in an electronic database which will ensure an easy access, he said. These processes would help lead to a quantum leap in the credit market and perhaps this will also lay the foundation for a corporate bond market,” he added.