Need to look at innovative ways to prevent IBC abuse: Corp affairs secy

The government needs to look at innovative ways, including minimum thresholds, to ensure that the insolvency resolution framework is not abused by homebuyers, a senior official said on Tuesday. Homebuyers are treated as financial creditors under the Insolvency and Bankruptcy Code (IBC).

Speaking at a function to mark the third anniversary of the Insolvency and Bankruptcy Board of India (IBBI), Corporate Affairs Secretary Injeti Srinivas also said the personal insolvency regime would be fully operational in one year. According to him, innovative ways need to be looked at to ensure that homebuyers do not abuse the insolvency resolution framework.

The cross border insolvency resolution framework is ready and the same is expected to be approved during the winter session of Parliament, he added.