Finance Minister Arun Jaitley on Saturday cautioned corporate defaulters saying that the old regime by which "lenders would get tired chasing errant borrowers and end up recovering nothing" was over, according to a report the Financial Express.
Jaitley warned that a borrower will have to service the debt in order to survive, or make way for somebody else.
Jaitley said, “I think this is the only correct way by which businesses would now be done.”
He further added that for a long time, a system existed that effectively protected the debtors and allowed assets to rust away as there was hardly any law for individual and partnership insolvencies.
Jaitley added that the message of cumulative effect of all the laws (including the Insolvency and Bankruptcy Code), was clear that the debtors will have to make sure that their debts are serviced.
“The ultimate object is not the liquidation of the assets, but to save these businesses and get either the existing promoters, with or without partners, or new entrepreneurs to come in and make sure that these valuable assets are preserved,” Jaitley said.
He said that the government is trying to strengthen infrastructure and is on par with the requirements of the Insolvency and Bankruptcy Code (IBC).
“The legislation has strict timelines and it is important to adhere to these timelines,” he said.