Insolvency and Bankruptcy code

Insolvency and Bankruptcy code

(GS Paper 3 , Banking Sector & NBFCs

Source- The Hindu)

Why in  news

  •  The government constituted a sub committee of insolvency law committee to make recommendation on pre pack insolvency resolution process
  • It is under the chairmanship of Dr MS Sahu  chairperson insolvency and bankruptcy board of India

 Insolvency law committee

  •  It is constituted by Ministry of Corporate Affairs
  •  It Examines  issues arising from the implementation of the insolvency and bankruptcy code

 What is pre packed insolvency resolution process

  •  It envisages formation of a regulation plant to resolve the corporate debtor stressed asset and debt
  • The plan would be negotiated circulated to creditors and voted upon before a case is filed

 Insolvency and Bankruptcy code 2016

 create a Framework for resolving insolvency in India

 What is insolvency

 It is a situation where individuals or companies are unable to repay their outstanding debt

 What is bankruptcy

  •  It is a situation where a Court has declared a person or other entity insolvent having passed appropriate orders to resolve it
  •  Insolvency and bankruptcy code has created institutions to facilitate resolution of insolvency such as-
  1.  insolvency professional
  2.  insolvency professional agency
  3.  information utilities
  4.  Adjudicating authorities
  5.  insolvency and bankruptcy board
  •  Critics also recognises its achievement according to them before IBC resolution process take an average of 4 to 6 year now it has come down to 317 days

-Khyati Khare

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