President Gives Nod To New Amendment Of Insolvency And Bankruptcy Code

The Logical Indian Crew

November 24th, 2017

Source: Wikipedia Image Credit: India Money, Facebook

President Ram Nath Kovind gave his assent for the amendment of the Insolvency and Bankruptcy Code (IBC) on Thursday.


What it means

Under this new ordinance, wilful defaulters will be barred from bidding their own assets under the Insolvency law. This also bars people associated with Non-Performing Assets from bidding their own assets. The Union Cabinet Minister passed the ordinance to streamline the stressed-asset resolution procedure.

This also makes it easy for Insolvency and Bankruptcy Board of India (IBBI) to effectively select people for bidding by outlining the exact eligibility criteria. This step was taken to curb fraudulent promoters and wilful defaulters from over companies going through resolution.


What is the Insolvency And Bankruptcy Code?

The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which was introduced in Lok Sabha in 2015 and was passed on May 5, 2016. The Code outlines separate insolvency resolution processes for individuals, companies and partnership firms. The time limit for the initiation is set. Both debtors and creditors can initiate the insolvency process. The entire process would be handled by professionals and the control over the debtor’s asset would be with them during the procedure. The code also dictates that the procedure would be overlooked by the Insolvency and Bankruptcy Board of India.


Experts say

According to LiveMint, the change comes at a time when the cases chosen by the RBI for bankruptcy proceedings are at the final stage of auctioning assets. 11 out of the 12 cases are at the final stage of auctioning assets. 29 more firms have been identified by the RBI which are heading towards bankruptcy if the owners cannot resolve issues before December 13.

Some experts are of the opinion that this will further slow down the process of resolution of assets. This is because the new criteria for eligibility are yet to be fixed and then only the process will start.

This ordinance is passed not through the parliament but in a hurry even though the winter session of the parliament is scheduled in December. Earlier the financial bill too was passed without it going to the Rajya Sabha.  

Share your thoughts..

Propelled by

VOLVO

Make Your City Safe

Related Stories

Steps Taken By Govt To Prevent Any Future Nirav Modis & Vijay Mallyas

Aircel Files For Bankruptcy Amid Debt Of Rs 15,500 Crore

RBI

RBI Announces New Norms To Tackle Bad Loan

Rajya Sabha Passes Insolvency Amendment Bill, Barring Offenders From Bidding For Troubled Assets

India’s NPA Has Crossed Rs 8.5 Lakh Crore

FAQs On Jaypee Infratech Insolvency Matter: Everything Homebuyers Should Know

Latest on The Logical Indian

Health

Maasika Mahotsav – A Week-Long Festival To Celebrate And Break Taboo Around Menstruation

News

16-Yr-Old Girl Chopped To Death For Demanding Salary; Was Lured From Jharkhand To Work As A Maid In Delhi

Get Inspired

Man Breaks Ramzan Fast To Donate Blood To Fellow Human

News

Gujarat: 5,229 Farmers Request Mass Euthanasia To Protest Land Acquisition

News

UP Villagers Crowd-Fund A New College After It Was Left Abandoned By Bachchan Family

News

Bengal Woman Paraded With Shoe Garland For Protesting Alleged Booth Capturing By TMC Workers