With Go First joining Jet Airways and others in the aviation sector that went bankrupt due to debt and financial stress, insolvency cases continue to haunt India's growth. In the October to December quarter of FY23, insolvencies went up by 25 per cent, while only 15 per cent were able to reach a resolution.
To involve all stakeholders including the public in the process of bankruptcy resolution, the Insolvency and Bankruptcy Board of India has sought feedback on regulations notified so far.
Involving the stakeholders in decision making
The aim is to get relevant ideas for building a regulatory framework under the insolvency law, by those who are affected by it most.
A key organisation for implementing the Insolvency and Bankruptcy Code since 2016, IBBI wants the regulations to evolve from a collective choice.
Channels for crowdsourcing ideas from the stakeholders and public general, to address their concerns, will be open till May 31, 2023.
After this, changes to the framework will be made if necessary, based on the inputs received.
When will we see the change?
Finally IBBI will notify the new regulations on March 31, 2024 and they will come into effect from April 1, 2024.
Even as IBBI tries to ensure the resolution of insolvency cases in a speedy manner, more than 12,000 cases are pending with National Company Law Tribunals.
The government is trying to amend the IBC, since the time taken for resolution of these cases has also tripled to 5 years.
