Insolvency Law Committee in place to address concerns raised by IBC: PP Chaudhary
New Delhi, Feb 10 (KNN) The Ministry Has has constituted Insolvency Law Committee (ILC) vide order dated 16.11.2017 with a view to examine the suggestions received regarding provisions of Insolvency and Bankruptcy Code, 2016 (Code), P.P. Chaudhary, Minister of State for Corporate Affairs said in written reply to a question in Lok Sabha today.
The Minister further informed that ILC shall take stock of the functioning and implementation of the Code, identity the issues that may impact the efficiency of the Corporate Insolvency resolution and liquidation framework prescribed under the Code and make suitable recommendations to address such issues, with a view to enhance efficiency of the processes prescribed and for effective implementation of the Code.
Citing numbers, the Minister said that as on 31st December 2017, 524 cases have been admitted for resolution by various benches of National Company Law Tribunal. Further, RBI has apprised that it issued directions to certain banks for referring 12 accounts, with outstanding amount greater than Rs.5,000 crore and with 60% or more classified as non-performing as on 31.03.16, to initiate the insolvency resolution process under IBC.
These 12 accounts constituted about 25% of the gross NPAs of the banking system. In addition, RBI also issued directions to resolve certain other accounts within six months, failing which insolvency proceedings under IBC will need to be initiated, the release from the Ministry said
One of the biggest worries under IBC is the concern for home buyers and it is is under examination by the ILC.
The other major concern is related to allowing promoters to bid for a companies or an asset that is being sought to be released is addressed by the IBC (Amendment) Act 2018, by which the IBC was amended to further strengthen the insolvency resolution process by prohibiting certain persons from submitting a resolution plan who, on account of their antecedents, may adversely impact the credibility of the processes under the Code and further make provisions to specify certain additional requirements for submission and consideration of the resolution plan before its approval by committee of creditors.
The ILC has sought suggestions/comments related to provisions of the Code and rules and regulations notified thereunder from stakeholders vide Public notice dated 12.12.2017, upto 10th January, 2018. The said suggestions/comments will be considered by ILC, the Minister further said. (With PIB Inputs) (KNN/DA)