The government’s openness to further discussions for making changes to the bankruptcy resolution framework comes at a time when the country is coming out of the economic impact of the pandemic and is looking at ways of efficient use and recycling of capital.
Discussions are on for reimagining the five-year-old Insolvency and Bankruptcy Code (IBC) in view of feedback from various stakeholders, said Rajesh Verma, secretary, ministry of corporate affairs (MCA).
The ministry recently held discussions on IBC with chief economic adviser Krishnamurthy Subramanian and the Insolvency and Bankruptcy Board of India (IBBI), Verma said at a conference on ‘Five Years of IBC’ organised by the Confederation of Indian Industry.
“Many issues have cropped up. We continue to engage with the stakeholders for reimagining IBC at this critical juncture of its existence. The ease of exit, as we know, is as important as ease of entry for a business," Verma said.
The Union government’s openness to further discussions for making changes to the bankruptcy resolution framework comes at a time the country is dealing with the economic impact of the covid-19 pandemic and is looking at ways to efficiently use and recycle capital.
IBC has brought in significant improvements in the way distressed businesses are dealt with compared to the previous regime, but legacy cases of sick companies, which were transferred from the erstwhile Board for Industrial and Financial Reconstruction (BIFR) to the National Company Law Tribunal (NCLT) have faced significantly high haircuts by lenders, a concern expressed by many experts.
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