Lok Sabha passes Insolvency and Bankruptcy Code, 2015

The Lok Sabha has unanimously passed Insolvency and Bankruptcy Code, 2015 by a voice vote.

The code seeks to ensure time-bound settlement of insolvency, faster turnaround of businesses and create a unified data base of serial defaulters.

Highlights of the Code

  • The Code creates time-bound processes for resolution of the insolvency of companies and individuals.
  • These processes will be completed within time-bound 180 days. If insolvency is resolved in stipulated time, the assets of the borrowers may be sold to repay creditors.
  • The resolution of the insolvency of processes will be conducted by licensed insolvency professionals (IPs). These IPs will be members of insolvency professional agencies (IPAs).
  • IPAs under insolvency resolution will also furnish performance bonds equal to the assets of a company.
  • The Code facilitates establishment of Information utilities (IUs) to collect, collate and disseminate financial information to facilitate insolvency resolution.
  • The insolvency resolution for companies will be adjudicated by the National Company Law Tribunal (NCLT). The Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution for individuals.
  • The Code also gives statutory backing establishment of the Insolvency and Bankruptcy Board of India to regulate functioning of IPs, IPAs and IUs.
For Detailed Analysis: Insolvency and Bankruptcy Code, 2015

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Categories: Banking Current Affairs 2017Bills and Acts in Current Affairs 2017

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