Govt to amend IBC to ease cross-border insolvency proceeds
The government will bring about necessary amendments in the Insolvency and Bankruptcy Code (IBC) to enhance corporate resolution and facilitate the cross-border insolvency process, Finance Minister Nirmala Sitharaman proposed in the Union Budget 2022-23.
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New Delhi: The government will bring about necessary amendments in the Insolvency and Bankruptcy Code (IBC) to enhance corporate resolution and facilitate the cross-border insolvency process, Finance Minister Nirmala Sitharaman proposed in the Union Budget 2022-23.
The main objective of the Code is resolving the corporate debtors (CDs) in distress. "Necessary amendments in the Code will be carried out to enhance the efficacy of the resolution process and facilitate cross-border insolvency resolution," she said while presenting the Budget 2022-23 in Parliament on Tuesday.
The government had suspended the initiation of the corporate insolvency process under IBC for one year from March 25, 2021, to March 24, 2021, to provide relief to the firms undergoing stress due to the pandemic. It also increased the minimum threshold for the insolvency process from Rs 1 lakh to Rs 1 crore. A pre-packaged insolvency resolution process was introduced under IBC as an alternative insolvency resolution process for corporate micro, small and medium enterprises in April 2021.
The Code has created a cohesive and comprehensive insolvency ecosystem. It has also opened possibilities of the resolution, including merger, amalgamation and restructuring of any kind besides opening opportunities to a host of professional service providers, the government said in the Economic Survey 2021-22 a day earlier.
