A meeting of the parliamentary panel on finance on Thursday discussed the need to make some provisions of the Insolvency and Bankruptcy Code (IBC), 2016, more robust, especially setting up 'dedicated' National Company Law Tribunal (NCLT) and National Law Appellate Tribunal (NCLAT) courts to expedite cases.
With the government set to introduce amendments to the code in the monsoon session of Parliament, the Parliamentary Standing Committee on Finance has expanded its agenda of reviewing the functioning of the IBC.
Until now, it has tried to understand the perspectives of the banks. In its subsequent meetings, it will examine its impact on the industry, especially the micro, small and medium enterprises (MSME) sector.
It could submit its report on the IBC during the monsoon session, sources said. At its Thursday's meeting, the panel met representatives of four public sector banks -- State Bank of India, Indian Bank, Bank of Baroda and Indian Overseas Bank -- in the morning on the subject of 'review of the working of the IBC and emerging issues'.
During the discussions, it was pointed out that under the existing law the corporate insolvency resolution procedure (CIRP) process has to be mandatorily completed within 330 days, but the average currently is 507 days. In that context, the panel suggested setting up of 'dedicated' NCLT and NCLAT courts for IBC cases. The discussion flagged the need for the law to cover cross-border insolvency and group insolvency, which it currently does not address. Members wanted to know the factual position related to the Bhushan Power and Steel Limited (BPSL).
The Supreme Court had in May quashed JSW Steel's resolution plan for BPSL, but the case is still sub-judice, the representatives of the banks argued. Panel members pointed out that it does not bar either Parliament or a Parliamentary Standing Committee to discuss the issue.
Later in the day, Reserve Bank of India Governor Sanjay Malhotra was to brief the panel on the subject of the IBC and emerging issues. However, members of the 31-member panel, which Bharatiya Janata Party MP Bhartruhari Mahtab heads, wanted to know from Malhotra about the economic challenges the country is facing. Malhotra briefed the panel on the steps that the central bank is taking in the face of global headwinds, and explained its position on cryptocurrency, among other issues. The panel is likely to ask the RBI representatives to appear before it on July 23 to discuss IBC.
-- Archis Mohan, Business Standard
