NEW DELHI: The Insolvency and Bankruptcy Board of India (IBBI) is scheduled to hold a meeting around November to discuss and finalise draft rules under the Insolvency and Bankruptcy Code, 2016.
These draft rules were notified earlier this month and put out for public comments till 31 October. The Centre has, till now, notified six draft regulations under the code — prepared by a working group of experts. “Hopefully, the final rules should be ready by next month,” said sources.
The board will discuss public comments that are being sought currently and finalise draft rules to be notified under the code during the first half of the next month, said the sources.
The government has already constituted the IBBI, while it is expected that the draft norms will be finalised after taking into consideration views of all the stakeholders.
Meanwhile, the insolvency board is chaired by M.S. Sahoo. The government has also appointed four part-time members to the board to make it functional and is in the process of appointing the rest.
The 10-member IBBI will regulate the functioning of insolvency professionals, insolvency professional agencies and information utilities under the code.
Earlier this month, the Centre had issued draft regulations pertaining to registration of insolvency professionals and agencies, under the code. The government, in May, also notified draft regulations related to the insolvency resolution process for corporates, liquidation of insolvent corporates and application to judicial authority.
The Code seeks to consolidate and amend laws relating to reorganisation and enable smoother and time-bound settlement of insolvency of corporates, partnership firms and individuals.
India performs badly compared to its peers in resolving insolvency, ranked as low as 136 among 189 countries.According to the World Bank, at present, it takes more than four years to resolve a case of bankruptcy in India. The code seeks to reduce this time to less than a year.
As the government moves closer to make the new institution fully functional, the law on bankruptcy envisages creating a supportive ecosystem including insolvency professionals, information utilities and a bankruptcy regulator.The law will also cover individuals, companies and partnership firms besides dealing with corporate insolvency.
