Sitharaman vows to strengthen insolvency code amid criticism of creditor losses

Nirmala Sitharaman stated during the inauguration of the refurbished court premises of the National Company Law Appellate Tribunal (NCLAT) in Chennai that the government is willing to make amendments to the Insolvency and Bankruptcy Code (IBC) to enhance its effectiveness.

“The laws require amendments to address the requirements of the industry, this has been well-taken by the Opposition as well, and there has never been a question or obstruction in having those amendments come through.”

The finance minister addressed the issue of delays in appointments to tribunal benches, stating, “There has always been a bit of resentment outside about the benches not being filled sooner with both judicial and technical members. If only these members are appointed in time and the cycle is maintained in a well-oiled fashion…the purpose of holding the NCLAT would itself be served better. The government has taken the point very seriously, and of late a lot of appointments have been made with full speed.”

“That has been repeatedly proven that the suggestion comes from the judiciary and we have taken it up from the government’s side frequently, and without any hesitation, we go to Parliament and have more and more amendments which only fine-tune the Act,” Sitharaman stressed.

It is to be further noted that the comments come as another set of IBC amendments is expected to be tabled in Parliament soon, including extending the pre-packaged insolvency scheme and a special insolvency regime. “Whether it is an amendment to the IBC, filling up positions, or to make sure there are enough Resolution Professionals (RPs), the Centre has always been in touch with the Insolvency and Bankruptcy Board of India,” Sithraman asserted.

“The latest amendment wherein the number of cases handled by the RPs being made limited would only bring in greater scrutiny to the process and make it more transparent,” FM further noted.