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180 days too long for resolving insolvency, says IBBI member
News:
- A member of the Insolvency and Bankruptcy Board of India (IBBI) said the current time limit to resolve insolvency cases was more than adequate. This needs to be examined in the backdrop of increasing demands for more time to resolve cases filed for bankruptcy.
Important Facts:
- A case admitted in the National Company Law Tribunal(NCLT) has to be resolved within 180 days. If not the company goes into liquidation.
- In some exceptional cases the NCLT will give 90 days extra for resolution.
- The IBBI Member is of the opinion that “In the present era, we have professionals with technology and offices that are increasing in efficiency.” thus 180 days is too long.
- The sooner the cases are dealt with, the sooner the business sector would move ahead.
- RBI has concentrated its attention on large and big accounts because they constitute more than 25% of the defaulters.
- When a loan is not repaid, the default is automatically considered as a criminal conduct under the Code. But there could be situations where the default is purely a result of market forces. Thus all defaults must not be considered as a crime.
