The account has added facilities for various frameworks for group sinks and cross -border insolvency Photocredit: Istockphoto
The government introduced changes to the insolvency and bankruptcy code on Tuesday aimed at resolution guided by the creditors, cross-border insolvency and bankruptcy of companies.
Finance Minister Nirmala Sitharaman moved the amendment law in the Lok Sabha, after which she encouraged the chairman to refer the bill to the Select Committee. The committee will give its report on the first day of the winter session of the parliament.
“The proposed changes are intended to reduce delays, to maximize the value for all stakeholders and to improve the management of all processes under the code. They try to change existing provisions to better align the general objectives of the code and to introduce new provisions that follow the worldwide Best SCHACTICES FOR SOLENT and REAR MENTAL CONSTRUCTION and Reason.
Faster resolution
The bill proposes the introduction of an insolvency rescue process initiated by the creditor ‘with an extrajudicial initiation mechanism for real business failures to facilitate faster and more cost -effective resolution of the insolvency, with minimal business disruption. Once implemented, ” This will help to alleviate the burden on judicial systems, promote the ease of doing business and improve access to credit, ‘the bill explained as the provisions for’ group Insolvence ‘and’ cross -border insolvency ‘add. A new chapter has been added to facilitate the process.
Group
The group injury framework for group conditions wants to efficiently resolve insolventions with complex business group structures, minimizing the destruction of value caused by fragmented procedures and maximizing the value for creditors by coordinated decision -making. A new chapter has been added to perform insolvency procedures and liquidation procedures in which these procedures are started against two or more business debtors who are part of a group.
It is intended to set up a voluntary procedural coordination framework for group insolvency. This will, among other things, ask the appointment of a group coordinator to facilitate communication, information and coordination of the procedures. The coordination will be an agreement between the participating business debts and their creditors committees. Moreover, a common bank can also be formed for further procedural coordination, the proposed change.
Cross -border insolvency
The cross -border insolvent framework is intended to lay the foundation for protecting stakeholders interests in domestic and foreign procedures, promoting the trust of investors and the coordination of domestic practices with international best practices. “This will also release the road for improved recognition of Indian insolvency procedures in other areas of law,” the bill added.
A new section will be inserted to enable the central government to prescribe rules with regard to cross -border insolvency procedures. It also offers the designation of one or more banks for dealing with a procedure under this section. Furthermore: “Before the rules under this section are issued, a draft of each proposed rule is proposed for each parliament of the rule parliament according to the procedure offered in this provision,” according to the bill.
Published on August 12, 2025
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