Centre likely to amend IBC in winter session to improve efficiency: Report
New Delhi, November 7, 2022
According to the data, 60 per cent of bankruptcy cases are pending for over 270 days under the IBC
The government may soon introduce an overhaul to the Insolvency and Bankruptcy Code (IBC) to improve efficiency among resolution professionals and faster resolution of companies. A report by Mint stated that the centre may seek the cabinet's approval for an amendment bill to the IBC in the upcoming winter session of the Parliament.
According to the data, 60 per cent of bankruptcy cases are pending for over 270 days.
"Expeditious admission of insolvency petitions and approval of resolution plans are most important, given that the time value of money is a key factor for the investor community. If resolution plans are not approved well in time, investors will lose interest," Anoop Rawat, partner (insolvency and bankruptcy) at law firm Shardul Amarchand Mangaldas and Co. told Mint.
"Governance of the defaulting company is an area that requires special attention. The IBC regime should also put in place provisions to protect the valuable business data of the defaulting company, such as orders, revenue and inventory, which help in planning for the corporate turnaround. Directors of the company could be made personally liable to ensure its safeguard," they added.
Under the current framework, it sometimes takes time for insolvency professionals to get timely decisions from the tribunals.
Recently, the Insolvency and Bankruptcy Board of India (IBBI) has been taking disciplinary action in the case of erring resolution professionals. This includes the imposition of penalties and training.
The new bill is expected to do away with the deficiencies.
[The Business Standard]