In the upcoming winter session of Parliament, the Centre may push some pending legislative reforms to give an impetus to the economy. These include amendments to the Insolvency and Bankruptcy Code (IBC) to introduce an out-of-court settlement process, and changes to the Companies Act to streamline corporate governance.
The session will likely begin on November 25 and end on December 20.
FE reported on Monday that the Centre may introduce a bill to push big-ticket reforms in insurance laws in the upcoming session to liberalise the sector further. The plan is to increase the foreign direct investment (FDI) limit to 100% from 74% and introduce composite licensing of life and non-life insurance.
However, the government may not take up the National Financial Information Registry (NFIR) Bill, which seeks to provide a 360-degree information system to lending institutions to quicken the process and reduce the cost of credit, sources said.
The much-awaited IBC amendment bill may introduce an out-of-court settlement process under the Code, namely the “Creditor Led Resolution Process (CLRP)” along with group-insolvency norms. Additionally, the Bill may remove interim moratorium provisions for personal guarantors’ assets.
“The amendment bill is a top priority for the Ministry of Corporate Affairs,” an official said.
The CLRP would be initiated by the financial creditors, after the occurrence of default by the corporate debtor (CD), but with minimum interference of the adjudicating authority (AA) or the NCLT, sources said.
A committee had recommended the CLRP to be completed in a total of 165 days, which is much shorter than the 330-day -timeline under the Corporate Insolvency Resolution Process (CIRP). In the CLRP, the admission stage is eliminated as there is no formal admission process and only intimation of initiation to the NCLT and the Insolvency and Bankruptcy Board of India. The NCLT’s role in this case is only limited to approval of the resolution plan. The CLRP is expected to put the insolvency process on the fast track in many cases and cut the workload of the tribunals, sources said.
The government was previously keen on introducing cross-border insolvency norms, as well as project-wise insolvency for real estate. But these provisions are unlikely to be part of the new Bill, the sources said.
The government may also table the Companies (Amendment) Bill 2024 to streamline corporate operations and enhance governance norms. Key changes are likely to be on easing the borrowing process of listed companies; incorporating a mechanism to enable courts to enforce a compromise/arrangement for dissenting creditors; streamlining the auditing process of companies; and relaxing the procedure of shifting registered offices among states, officials said.
Among others, the government may introduce a Bill to restore statehood to Jammu and Kashmir, which was made a Union Territory in October 2019.
It will also likely take up the Waqf (Amendment) Bill, 2024 to improve the management and administration of Waqf properties in India.