Government mulls review of bankruptcy code: Report
The government is reportedly considering forming dedicated NCLT benches to handle insolvency proceedings.
March 16, 2020 / 03:07 PM IST
Looking to address the issue of non-adherence to timelines under the Insolvency and Bankruptcy Code (IBC), the government is set to conduct a full review of the process, according to a report in The Indian Express.
"The government is doing a complete review of the IBC (to reduce time taken for resolution). The leadership of the National Company Law Tribunal (NCLT) is also seized of the matter," a government official told the paper.
Moneycontrol could not independently verify the report.
At present, the norms state that the resolution process of an insolvent company should be completed within 330 days. The government wants to reduce the average time taken for the CIRP by 60 days, the report said.
Lenders have often raised the issue of non-adherence to timelines after a company is taken to the bankruptcy court.
To speed up the CIRP, the government may permit use of information utilities (IUs) to verify claims by creditors, The Indian Express reported. IUs provide a database of information regarding debts from stakeholders.
The government is also considering forming dedicated NCLT benches to handle insolvency proceedings, the report said.