Indian traders all for new rules on bankruptcy laws

PETALING JAYA - Indian businessmen have welcomed the Prime Minister's proposal to review the country's bankruptcy laws, describing it "timely" as guarantors, and not debtors, make up the majority of those declared bankrupt.

"Such people, especially entrepreneurs, should be given a fair chance to clear their names rather than be held accountable for the borrowers' failure to settle their loans," Malaysian Associated Indian Chambers of Commerce and Industry (MAICCI) president Datuk K.K. Eswaran said yesterday.

He lauded Datuk Seri Najib Tun Razak's proposal at the closing of the Umno general assembly earlier this week.

Eswaran said the review should include discharge by the Insolvency Department director-general after two years of being declared bankrupt, as well as raising the minimum threshold for bankruptcy from RM30,000(S$12,081) to RM100,000.

He said those declared bankrupt should be allowed to start up small businesses, or be gainfully employed, in order to expedite the discharging process.

"In many developed countries, bankrupts are discharged when they go through a required process of asset liquidation in the quickest possible time frame.

"Once the authority is satisfied that the bankrupt has been given the appropriate counselling and has taken the recommended remedial works, the person is discharged from the remaining liabilities," Eswaran pointed out.

He reminded creditors to ensure they were fully aware of a borrower's financial standing before extending loan.

"If credit is over-extended, then both the creditor and debtor should take joint responsibility and close the matter as soon as possible without wasting government resources over an extended administration of the bankruptcy."