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CMA Final · Risk Management in Banking and Insurance · Management of Non-Performing Assets (NPAs)

Under Section 29A of the Insolvency and Bankruptcy Code, 2016, which of the following persons is NOT eligible to submit a resolution plan?

A wilful defaulter under RBI guidelines issued under the Banking Regulation Act, 1949 is ineligible to submit a resolution plan under Section 29A(b). The other persons described are eligible because of the repayment proviso, the financial entity exemption, or expiry of two years after release.

  1. AA person who is a wilful defaulter in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949Correct
  2. BA person whose only past default was fully repaid with interest before submission of the plan
  3. CA scheduled bank that is not a related party of the corporate debtor
  4. DA person who was released from a conviction more than two years ago for an offence punishable with imprisonment of seven years under another law

Explanation

Section 29A(b) makes a wilful defaulter, as per RBI guidelines under the Banking Regulation Act, 1949, ineligible. The other persons are eligible: payment of overdue amounts with interest cures the NPA bar, a financial entity that is not a related party is exempt, and the conviction bar lapses two years after release.

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