Right to Recompense to banks should be put in place to bid for stressed assets: Sajjan Jindal

JSW group chairman Sajjan Jindal on Tuesday said that a strong monitoring mechanism with Right to Recompense to banks should be put in place for promoters for stressed assets apart from dubious and wilful defaulters if they wish to bid for their assets.

Posting his thoughts on the micro-blogging site Twitter, Jindal said that the government must closely monitor the proceedings to prevent existing promoters to re-acquire the assets with a haircut without a Right to Recompense to banks to make the IBC process credible.

Jindal was referring to how promoters who want to bid for their own companies that have been initiated into insolvency proceedings by the NCLT should be treated. "Dubious promoters should not be allowed to bid for their assets," Jindal has said earlier.

A Right to Recompense is a tool by which banks, that take large haircuts on the debts for stressed assets during resolution, can recover the sacrifice they make in due course of time.

ET had reported on Monday that Seshagiri Rao, JSW Steel group MD said that banks should classify promoters into dubious, wilful/non-cooperative and based on their classification, decide whether they should be allowed to bid or not.