The Indian Government has said that it is likely to introduce in the monsoon session of Parliament a separate bankruptcy law to deal with insolvency in financial sector companies that include banks and NBFCs.
Commenting on the issue, a senior finance ministry official told the media, "The proposed bill will cover all financial service providers that include banks, NBFCs and microfinance institutions which have money deposited.
"The law will help safeguard the interest of depositors," he added.
"The proposed legislation for resolution of bankruptcy in financial firms are under works and our endeavour is to introduce in the upcoming monsoon session of Parliament. Financial firms by their nature and characteristics, have depositor money as well. So, an appropriate resolution processes for orderly winding down of financial firms is not an easy process," the official further added.
As per reports, the Insolvency and Bankruptcy Code (IBC) 2016 was passed by Parliament last year to deal with cases of corporate or companies other than the financial sector.
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