BackBankruptcy code to come into force by year-end: Shaktikanta Das
The government has maintained it is following an aggressive timeline for implementing the law, which is expected to be a game changer for the resolution of insolvency cases
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New Delhi: The Insolvency and Bankruptcy Code is expected to become operational by the end of the year, economic affairs secretary Shaktikanta Das said on Tuesday.
The government has maintained it is following an aggressive timeline for implementing the law, which is expected to be a game changer for the resolution of insolvency cases.
The bankruptcy law brings more clarity, providing a comprehensive and dynamic legal framework for the resolution of insolvencies, which in turn will make it easier to do business, added Das.
“We have a definite roadmap to implement the bankruptcy law. The ministry of corporate affairs is working on it. The law ministry, the legislative department have played a significant role and are working on finalising the regulation. We therefore expect the entire bankruptcy and insolvency law will become operational by end of December," Das said at an Assocham conference.
The government has already constituted the Insolvency and Bankruptcy Board which is scheduled to hold its second meeting around 11-12 November to finalize the draft rules under the Insolvency and Bankruptcy Code, 2016.
The government has so far notified six draft regulations under the code prepared by a working group of experts and put them out for public comments until 31 October. The draft rules, when finalized, will be another step to implementing the bankruptcy code.
Das said the insolvency law, together with the goods and services tax, will bring in more dynamism and efficiency in the Indian economy.
Earlier this month, the centre had come out with draft regulations for the registration of insolvency professionals and agencies and model by-laws 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 facilitate smoother, time-bound settlement of insolvency, enable faster turnaround of businesses and create a database of serial defaulters.
The law on bankruptcy envisages creating an 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.
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