Cabinet approves ordinance to amend Insolvency and Bankruptcy Code

The Central Cabinet on Wednesday approved the promulgation of an ordinance for amending the Insolvency and Bankruptcy Code (IBC). The amendment will be placed before the Parliament in the winter session.

Finance Minister Arun Jaitley after the cabinet meeting said, “Some changes are proposed to the Insolvency and Bankruptcy Code.”

Jaitley did not divulge details about the proposed changes to made in the IBC.

According to an government official the amendment is likely to streamline the process of selecting buyers of stressed assets. He added that the proposed ordinance is expected to be effective from Thursday after President approves it.

The amendments are aimed to prevent defaulters and ones having past fraud records.

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The year-old Code is part of an effort started by the ministry of corporate affairs and the Insolvency and Bankruptcy Board of India to strengthen the IBC.

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In its first batch, the Reserve Bank of India referred 12 large defaulters to their creditors in 2017 for launch of bankruptcy proceedings at the National Company Law Tribunal.