The 'automatic discharge' order, which will allow a bankrupt company to have a second chance at conducting business, is being proposed under an amendment to the Bankruptcy Act 1967 (Act 360).

SME Corporation Malaysia (SME Corp) Chief Executive Officer Datuk Hafsah Hashim said the proposal would not only help propel the Malaysian economy but also give certain individuals an 'opportunity to start a new lease of life.'

"In Malaysia, once you are declared bankrupt, you are doomed for life. These people, who are down and out, do not want to go on the same path again.

"Therefore, they will aim higher when they come back. They'll be more careful, cautious, innovative and creative," she told reporters on the sidelines of the Malaysia Competition Conference 2017 here today which was officiated by the Sultan of Perak Sultan Nazrin Shah today.

Minister in the Prime Minister Department Azalina Othman said recently that the government was considering amending Act 360 to protect those who acted as guarantors, especially social guarantors, to borrowers who fail to repay the loan.

Hafsah said the amendment was in the final stage and would be discussed in the current sitting of Parliament.

She said the 'automatic discharge' order for the period of between one and three years was already implemented in countries such as Japan, the United Kingdom and Germany.

"So for us, if we want to become a developed nation, we must emulate what other developed nations have done in terms of best practices," she added. - BERNAMA