A scattered regime prior to the enactment of the Insolvency and Bankruptcy Code (IBC) is responsible for high Non-Performing Assets (NPAs) of banks, said Finance and Corporate Affairs Arun Jaitley.

Speaking via Video Conferencing in a conference in IBC, Jaitley said that the scattered regime prior to the enactment of the Insolvency and Bankruptcy Code (IBC), 2016 had impacted the domestic private investment with over capacities in certain sectors coupled with unacceptably high levels of Non-Performing Assets (NPAs) in the Banking System, hindering growth.

To address these concerns, the Finance Minister said that this Government not only enacted the Code expeditiously, but also has been implementing it at an unprecedented pace. 

It was anticipated that in the initial days, there would be some teething troubles, he said adding that the Government is addressing these troubles on priority. 

Despite the initial difficulties, the outcome from implementation of the Code has been better than the anticipated, he added. 

Speaking further on the occasion, Jaitley said that the only downside has been that in some of the cases because of appeals and counter-appeals and litigations, the process has got somewhat delayed.

But then the Supreme Court has stood-up to the occasion, he added.

While referring to the regrettable phenomenon of unwillingness of the debtors to repay the debts in the past, the Finance Minister emphasized that the Code has significantly changed the lender-borrower relationship in India.

He further said that a very large number of debtors who fear that they are about to touch or cross the red line after which they will be in the NCLT (National Company Law Tribunal) are now refraining themselves from becoming defaulters.