The Union government is discussing amendments to the Insolvency and Bankruptcy Code (IBC) law to cover a wide gamut of issues. As per initial information, many of the provisions in the rules could be included in the IBC law. This comes as the government said in the ongoing winter session of the Parliament that 47 percent of IBC cases went beyond the 270-day deadline
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The aim of the amendments is to maximise value, cut delays, and expedite resolution. Further, the new amendments would aim for a tighter timeline for applications, litigation, liquidation, and bids.
In addition to this, the Reserve Bank of India (RBI) Governor Shaktikanta Das, speaking at the event in Mumbai, said the IBC should not be seen as a recovery mechanism but a way to bring resolution in a time-bound manner.
Earlier in October, Union Finance and Corporate Affairs Minister Nirmala Sitharaman said that the insolvency law has achieved more than six years of work and "cannot lose its sheen".
"We can't treat companies facing distress with delay... We cannot have stress signals go unnoticed," she said at the event. "I am happy to hear that now we are getting a provision where institutions of resolution professionals are also coming up. It will help in cases where one or two resolution professionals are unable to find the best solution, at times more minds need to be applied."
By September 30 this year, more than 23,000 IBC applications were resolved before admission amounting to approximately 7.3 lakh crores.
The IBC was introduced in 2016 to fast-track the resolution of banks' non-performing assets (NPAs) with the aim to simplify the process of bankruptcy proceedings and ensure fair negotiations between the borrower and creditors. However, recovery from IBC has not been at par with the government's expectations.
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