NEW DELHI: Moving ahead with the selection process for chairman and members of the Insolvency and Bankruptcy Board, the government has notified certain provisions of the new law that aims to make debt recover process more strong.
The Insolvency and Bankruptcy Code, 2016 -- notified by the government in May -- seeks to consolidate and amend laws relating to reorganisation as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.
Corporate Affairs Ministry has already sought applications for the post of chairman and three whole time members at the Insolvency and Bankruptcy Board, to be set up under this law.
With regard to the selection process, certain provisions of the law has been notified. "... the central government hereby appoints August 5, 2016 as the date on which the provisions of sections 188 to 194 (both inclusive) of the said Code shall come into force," the Ministry said in a notification.
These sections have been notified to enable the selection of chairman and members to the board, a senior official said. Section 188 to 194 pertain to establishment and incorporation of the board as well as related rules.
The board would have ten people including the chairperson. Apart from a secretary level officer, three experts from the field of finance, law, management, insolvency and related subjects would be part of the panel. They would be nominated by the government.
Besides, three ex-officio members representing the Ministries of Finance, Corporate Affairs and Law would be there. Under the new law, employees, creditors and shareholders would have powers to initiate winding up process at the first sign of financial stress such as serious default in repayment of bank loan.