New Delhi: The government plans to use the insolvency law to waive off the debts of small distressed borrowers. Briefing reporters in this regard, a senior official said the proposed exemption will be offered under the 'Fresh Stat' provision under the Insolvency and Money Laundering Code (IBC).
Corporate Affairs Secretary Ingeti Srinivas said that discussions have been held with the microfinance industry to prepare a roadmap for the proposed relief to the small distressed borrowers of the economically weaker section (EWS). He stressed that the most troubled people in the EWS category will be given relief under personal bankruptcy. "If you take advantage of a new beginning, you will not be able to get the benefit for five years.
He said, "We have worked on all conditions to the satisfaction of the microfinance industry. "It would be like getting a haircut," Srinivas said during an interview. At the national level, for a period of three years, it will not exceed Rs. "We had discussions with the microfinance industry and their concerns are also being addressed. We do not intend to destroy the microfinance industry. '