Finance Panel for appointing HC judges as NCLT members to reduce litigation

What is the News?

The Standing Committee on Finance of the Lok Sabha has recommended overhauling the entire IBC (Insolvency and Bankruptcy Code) process.

Click Here to Read about Insolvency and Bankruptcy Code

Problems in the IBC Process:

Click here to read about the challenges with the IBC

Recommendations of the Standing Committee on Finance:

• Reduce delay in admitting new cases at NCLT (National Company Law Tribunal)
• Do not allow fresh bids once the highest bidder is selected
• Have a benchmark for haircuts
• Impart better training to NCLT members
• Fill up vacancies at NCLT
• Allow flexible resolution plans, wherein multiple companies can take over the assets of the stressed company, instead of one bidder acquiring all the assets
• An Institute of Resolution Professionals may be established just like the Institute of Chartered Accountants of India(ICAI) to oversee and regulate the functioning of RPs so that there are appropriate standards and fair self-regulation.

Terms to know: 

• Insolvency and Bankruptcy Code (Amendment) Ordinance 2021.
• Pre-Pack insolvency resolution
• Asset Reconstruction Company
• Bad bank
• Debt Recovery Tribunal
• National Company Law Tribunal