Framework needed to understand the impact of insolvency law, government is trying to bring reforms: Corporate Affairs Secretary
Corporate Affairs Secretary Rajesh Verma said that there should be a framework to study the impact of this law.
Corporate Affairs Secretary Rajesh Verma said on Saturday that there should be a framework to study the impact of this law. Verma said that the government and regulators are making every effort to rectify any lapses in the IBC.
insolvency law (Insolvency) Amid concerns in some sectors that liquidation could be more likely to happen instead of resolving stressed assets, Corporate Affairs Secretary Rajesh Verma on Saturday said there should be a framework to study the impact of the Act. Verma said that the Insolvency and Bankruptcy Code (IBC) Government to rectify any defect in the (Government) And the regulators, the Insolvency and Insolvency Board of India (IBBI), are trying hard. He said that this law ,Law, has brought about a cultural shift in the dynamics between lenders and borrowers, promoters and creditors.
The IBC Act came into force in the year 2016 and since then it has undergone six amendments. Under this, time bound and market related solutions are given for stressed assets.
Verma said that some critics say that instead of getting a solution from IBC, the situation of liquidation is being created more. There is currently no format for finding out the insolvency law. It is necessary to study the impact of the insolvency profile of the IBC and also to analyze it to find out its merits.
At the opening ceremony of the two-day conference on IBC, Verma also said that the World Bank’s trading indicators, which record IBC results, have now been discontinued. Speaking on the occasion, IBBI Chairman Ravi Mittal said that a large number of stressed assets are going into liquidation as they have come very late in the process of IBC. He said in a month or two they would see how to promote debt resolution instead of liquidation.
Mittal said the stressed assets should be brought under the IBC process at the earliest and winding up (liquidation) of the company should be the last option.
What is the meaning of insolvency and bankruptcy?
Let us first learn about insolvency. It is a situation in which a person or company is unable to repay its outstanding debt. As you have been seeing in the case of Vijay Mallya. On the other hand, Bankruptcy is a situation when a person or institution is declared bankrupt by a competent court.
Along with this, appropriate order has been given by the court to solve it and protect the rights of the creditors. It is a legal declaration by a company or person of the inability of that person or company to pay the debts.
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