IBC Section 29A being stretched too far, needs more clarity: SBI chief

As per him, currently most of the litigations are due to Section 29A, and it has become the most contentious issue.

State Bank of India (SBI) chairman Rajnish Kumar said Section 29A of Insolvency and Bankruptcy Code (IBC) is being “stretched too far” and needs more clarity.
 
Section 29A of IBC lays down a broad range of disqualifications for a person to be an eligible resolution applicant. “But this section, in my view is being stretched too far and there is a need that more clarity is brought about,” he was quoted as saying, while speaking at an event in Mumbai.
 
As per him, currently most of the litigations are due to Section 29A, and it has become the most contentious issue.
 
According to him, while the intent of IBC Section 29A is very clear that the defaulting promoters should not be in the driver’s seat once again.
 
Kumar said he expects more clarity to emerge on this issue at an appropriate time.
 
Besides, SBI chief put forth his view against the practice of allowing late bidders for assets under IBC. 
 
“When we have completed the bid process, someone would say he has a cheque for a higher value. They were sleeping all throughout the process which has gone on for nine months and then suddenly they say that since ₹15,000 crore is the highest bid, please take ₹16,000 crore,” he was quoted sa saying.
 
Kumar also spoke on the issue of bidders not paying for the asset despite approval of their plans, and suggested "exemplary punitive actions" against them.
 
Source: LiveMint

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