NEW DELHI: Taking a lesson from PNB scam Indian Govt enacted Insolvency and Bankruptcy Code (IBC), and  under this code the fear of losing control over their companies promoters, who have failed to pay on repayment of loans to banks, settled their dues of around Rs 83,000 crore before action was initiated  As TOI reported.

Data compiled by the ministry of corporate affairs (MCA) showed that more than 2,100 companies have cleared their over dues amounts, a greater part of which came after the government amended the IBC to openly bar promoters of companies that were classified as a non-performing assets (NPAs) from bidding for these companies where the National Company Law Tribunal, the bankruptcy court, made the first move of action. A loan is classified as an NPA if dues are not paid for 90 days.

The Modi-Govt move had faced harsh disapproval from the corporate sector as top names in the industry such as Ruias of Essar, Singals of Bhushan Group and Gaurs of Jaiprakash Group were locked out of the resolution process and there were worries that the bids may not be destructive, consequential in the lenders having to pull through only a small part of the loans.

The government had responded to the condemnation by arguing that the move was meant to ensure that the promoters did not flee away with the similar asset at a heavy discount.