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Changes In Ibc: A Law Will Be Made To Confiscate Foreign Assets, Amendment Bill Is Being Prepared On The Report Of Parliamentary Committee

Business Desk, Amar Ujala, New Delhi

Published by: Yogesh Sahu
Updated Fri, 26 Nov 2021 03:22 AM IST

Summary

1.82 lakh crore has been recovered under IBC in five years, while more than 80 percent of the haircuts affect the recovery.

The government is preparing for major changes to make the Insolvency and Bankruptcy Act (IBC) more effective. The government is likely to introduce a revised bill in the Parliament session starting November 29 to resolve issues like long settlement process, low recovery and heavy haircuts. In this, a law can be made to confiscate foreign assets to curb economic fugitives.

According to sources, on the basis of the report of the Parliamentary Committee on Financial Affairs, the revised bill of the IBC will be prepared. In this, the emphasis will be on reducing the time taken in the process and reducing the proportion of the haircut.

Some changes will also be made in the law for speedy disposal of debt-ridden companies. At the same time, the government is emphasizing on creating a cross border insolvency framework for confiscation of foreign assets. This framework is believed to be very important in dealing with fugitive economic offenders.

180 days set for resolution now
There are currently 180 days to complete the corporate insolvency resolution process, but in reality, it takes more than a year to settle such cases. The committee has recommended further reduction of this resolution time. A total of 4,541 cases have been settled so far since the law came into force in 2016.

Out of 13.94 lakh crore involved, only Rs 1.82 lakh crore has been recovered. The committee, in its report, has expressed concern over more than 80 per cent haircuts and has also raised questions on valuation of properties in many cases.

Insolvency law changed attitude of borrowers: Goyal
Commerce Minister Piyush Goyal has said that the IBC has played a big role in the recovery of loans from the corporate world and there has been a big change in the attitude of banks and borrowers after the implementation of the law. Speaking on the fifth foundation day of the Indian Institute of Insolvency Professionals, Goyal said earlier the corporate resolution process used to take decades.

The IBC ensured that the bad loans would have to be recovered within the stipulated time. The whole economy will get the benefit of the change in the mindset regarding debt. Along with this, the confidence of banks in the corporate world will also increase.

Expansion

The government is preparing for major changes to make the Insolvency and Bankruptcy Act (IBC) more effective. The government is likely to introduce a revised bill in the Parliament session starting November 29 to resolve issues like long settlement process, low recovery and heavy haircuts. In this, a law can be made to confiscate foreign assets to curb economic fugitives.

According to sources, on the basis of the report of the Parliamentary Committee on Financial Affairs, the revised bill of the IBC will be prepared. In this, the emphasis will be on reducing the time taken in the process and reducing the proportion of the haircut.

Some changes will also be made in the law for speedy disposal of debt-ridden companies. At the same time, the government is emphasizing on creating a cross border insolvency framework for confiscation of foreign assets. This framework is believed to be very important in dealing with fugitive economic offenders.

180 days set for resolution now

There are currently 180 days to complete the corporate insolvency resolution process, but in reality, it takes more than a year to settle such cases. The committee has recommended further reduction of this resolution time. A total of 4,541 cases have been settled so far since the law came into force in 2016.

Out of 13.94 lakh crore involved, only Rs 1.82 lakh crore has been recovered. The committee, in its report, has expressed concern over more than 80 per cent haircuts and has also raised questions on valuation of properties in many cases.

Insolvency law changed attitude of borrowers: Goyal

Commerce Minister Piyush Goyal has said that the IBC has played a big role in the recovery of loans from the corporate world and there has been a big change in the attitude of banks and borrowers after the implementation of the law. Speaking on the fifth foundation day of the Indian Institute of Insolvency Professionals, Goyal said earlier the corporate resolution process used to take decades.

The IBC ensured that the bad loans would have to be recovered within the stipulated time. The whole economy will get the benefit of the change in the mindset regarding debt. Along with this, the confidence of banks in the corporate world will also increase.

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