Draft rules for Insolvency Code may be finalized in November
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The Insolvency and Bankruptcy Board of India (IBBI) is scheduled to hold its second meeting around 11-12 November to finalize the draft rules under the Insolvency and Bankruptcy Code, 2016.
The draft rules were notified earlier this month and put out for public comments till 31 October.
The central government has so far notified six draft regulations under the code prepared by a working group of experts.
It is expected that the board, at next month’s meeting, will discuss the public comments and finalize draft rules to be notified under the code, taking stakeholders’ views into consideration.
The draft rules, when finalized, will be another step to implementing the bankruptcy code and in the process improving the ease of doing business in India.
Earlier this month, the centre had come out with draft regulations for the registration of insolvency professionals and agencies under the code. It also notified draft regulations pertaining to the insolvency resolution process for firms, the liquidation of insolvent firms and applications to judicial authority.
The rules will be finalized by the corporate affairs ministry.
The bankruptcy code will enable smoother, time-bound settlement of insolvency, enable faster turnaround of businesses and create a database of serial defaulters.
The law on bankruptcy envisages creating a complementary ecosystem, including insolvency professionals, information utilities and a bankruptcy regulator.
The insolvency and bankruptcy law is overarching in nature, covering individuals, companies, limited liability partnerships and partnership firms, and will also deal with corporate insolvency.
The insolvency board is chaired by M.S. Sahoo. The government has also appointed four part-time members to the board to make it functional and is in the process of appointing five more members, with three full-time members. The 10-member board will regulate the functioning of insolvency professionals, insolvency professional agencies and information utilities under the code.