Modi Government to bring in ordinance for changes in insolvency law

Corporate Affairs Minister Arun Jaitley today said that Cabinet has approved amendments to the Insolvency and Bankruptcy  Code (IBC).

An ordinance will be brought in to introduce the suggested changes in the bankruptcy code during the Winter Session of the Parliament, which is expected to begin in December.

While Jaitley did not divulge details of the amendments, news reports suggested that the changes will prevent wilful defaulters to bid for stressed assets that they had previously owned.

IBC had become operational in December  2016, with an aim to come up with time-bound insolvency resolution process.

The corporate affairs ministry has also set up a 14 member panel to suggest ways to address issues faced in implementing of the code.

In India, close to 3,500 cases have been filed for insolvency, out of which around 300 have been admitted to National Company Law Tribunal (NCLT), which is the Arbitration authority for cases filed under IBC.

The first batch of 12 large defaulters were referred to their creditors by the Central Bank in June. These defaulters constitute a fourth of the total non performing assets that the banks have been grappling with.