MCA has issued a notice inviting online public comments on the proposed amendments in the Insolvency and Bankruptcy Code (IBC) 2016, latest by 07/02/2023.
The establishment of an effective insolvency resolution structure is critical to long-term economic growth and stability. The Insolvency and Bankruptcy Code (IBC) of India was enacted in 2016, marking a significant step forward in this direction. This law provides a comprehensive, modern, and complex framework for insolvency.
The IBC 2016 is the country’s first comprehensive law addressing the issue of personal and corporate bankruptcy. The provisions of the IBC 2016 on the resolution of corporate insolvency and the liquidation of corporate persons became legally binding in December 2016.
In the case of personal guarantors to corporate entities, provisions for insolvency resolution and liquidation went into effect in December 2019, when they were applied to insolvent individuals.
In addition, in November of 2019, a second customised framework specifically designed for financial service providers was notified under the IBC 2016. Also, in April 2021, the Micro, Small, and Medium-Sized Enterprises (MSMEs) insolvency resolution framework was implemented.
The Ministry of Corporate Affairs (MCA) invited members of the public to provide feedback on a variety of topics concerning the corporate insolvency resolution and liquidation frameworks, as well as the introduction of a cross-border insolvency framework, during the months of November and December in 2021.
Following the collection of public feedback in response to the invitation, additional amendments to the IBC 2016 are being considered in order to strengthen its frameworks.
It is the goal of the MCA to improve the operation of the IBC 2016, and as a result, certain changes or amendments to the Code are currently being proposed in relation to the admission of corporate insolvency resolution process (“CIRP”) applications, streamlining the insolvency resolution process, recasting the liquidation process, and clarifying the role of service providers under the Code.
MCA Notice dt. 18/01/2023: Invitation for Public Comments on Proposed Amendments in IBC 2016