Finance minister Nirmala Sitharaman on Saturday said the Centre has no hesitation in amending the Insolvency and Bankruptcy Code (IBC) to make it more robust, amid growing criticism about a slowing of the resolution process and falling recovery for creditors.
Speaking at the inauguration of the renovated court premises of the National Company Law Appellate Tribunal (NCLAT) in Chennai, the FM said: “The laws require amendments to address the requirements of the industry, this has been well-taken by the Opposition as well, and there has never been a question or obstruction in having those amendments come through.”
On the delays in appointments to the tribunal benches, the FM said: “There has always been a bit of resentment outside about the benches not being filled sooner with both judicial and technical members. If only these members are appointed in time and the cycle is maintained in a well-oiled fashion…the purpose of holding the NCLAT would itself be served better. The government has taken the point very seriously, and of late a lot of appointments have been made with full speed.”
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“That has been repeatedly proven that the suggestion comes from the judiciary and we have taken it up from the government’s side frequently, and without any hesitation, we go to Parliament and have more and more amendments which only fine-tune the Act,” she added.
The minister’s comments come at a time when another set of amendments to the IBC are likely to be tabled in Parliament soon. The corporate affairs ministry had proposed extending pre-packaged insolvency scheme — currently meant to resolve stress in only micro, small and medium enterprises (MSMEs) — to a certain category of larger firms and a special insolvency regime, as part of these amendments.
Whether it is an amendment to the IBC, filling up positions, or to make sure there are enough resolution professionals (RPs), the Centre has always been in touch with the Insolvency and Bankruptcy Board of India, the minister pointed out. The latest amendment wherein the number of cases handled by the RPs being made limited would only bring in greater scrutiny to the process and make it more transparent, she added.
According to the FM, there were a few occasions of some “interest” operating in decision-making at the level of the RPs. In such cases, the Centre has taken a corrective course of action. “That is where I think there should be a lot of interchange of views and exchange of suggestions both from the technical and judicial members so that we make sure IBC is a success.”
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“When the processes are rid of all these little glitches of anyone trying to play up the system, we have greater confidence coming in the minds of the investors. Negotiations now concede that India has a more robust system and is providing confidence for investors coming to the country,” she added.