Sitharaman’s comments came amidst the alleged Rs 4,355 crore fraud at Punjab and Maharashtra Co-operative (PMC) Bank. Finance Minister Nirmala Sitharaman has said that uncertainty arising out of one case should not be generalised about the efficiency and effectiveness of Insolvency and Bankruptcy Code. Sitharaman was responding to a question on a particular recent case which many allege reflects some major loopholes in the IBC. Her comments came amidst the alleged Rs 4,355 crore fraud at Punjab and Maharashtra Co-operative (PMC) Bank.
The alleged loan fraud at the bank came to light after the Reserve Bank of India found irregularities and imposed restrictions on the lender last month. “I don’t think we should escalate one case to reflect everything to do with IBC,” Sitharaman told reporters at a news conference here. “If ED attaches somebody’s property and as a result of which some uncertainty comes into the IBC process, it’s nothing first of all to say on the IBC itself,” Sitharaman said responding to a question on a recent case.
“That’s not going to happen in every case when the company is going for a solution. So I don’t think we should escalate one case to reflect everything to do with IBC,” Sitharaman said. The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. The code aims to protect the interests of small investors and make the process of doing business less cumbersome. The finance minister is here for the annual meetings of the International Monetary Fund and the World Bank.
In her address to the IMF and World Bank, she mentioned that trade wars and protectionism have generated uncertainties that will ultimately impact flow of capital, goods and services. She exhorted the community of nation towards “concerted action”. There is need to strengthen the spirit of multilateralism and develop a new paradigm of global cooperation. Sitharaman further added that the increased trade integration, geopolitical uncertainties, and high accumulated debt levels necessitate strong global coordination and that we need not wait for the slowdown to become a crisis. In her meetings with G-20 leaders, the focus of discussions was on the current challenges to the global economy and possible responses to mitigate them. She emphasized that the G20 has the responsibility to navigate the global policy co-ordination in effective fashion by identifying and taking strong measures for building buffers and catalysing the second wave of reforms.
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