Revamping India's Insolvency Framework: Speeding Up Resolutions

The Indian government is creating an integrated insolvency platform to enhance resolution speeds under the Insolvency and Bankruptcy Code (IBC). Emphasizing IBC as a rescue, not recovery, mechanism, the platform will link key entities and alert on delays, addressing concerns of prolonged resolution processes.

The government is gearing up to launch an integrated platform that aims to transform the insolvency ecosystem in India by expediting resolution processes. The platform will involve all key stakeholders, thereby addressing long-standing concerns about delays in handling stressed assets since the implementation of the Insolvency and Bankruptcy Code (IBC) in 2016.

Anita Shah Akella, Joint Secretary at the Ministry of Corporate Affairs, clarified at a recent conference in New Delhi that the IBC is fundamentally a rescue mechanism and not merely a tool for financial recovery. She reiterated that efforts are ongoing to refine these resolutions with the development of the new platform.

The proposed system will adopt a federated architecture to facilitate seamless data sharing between the Ministry of Corporate Affairs, the Insolvency and Bankruptcy Board of India, National Company Law Tribunal, National Company Law Appellate Tribunal, and insolvency professionals. Features like delay notifications and real-time alerts aim to mitigate the backlog, as data reveals that a significant number of cases have exceeded the stipulated 270-day resolution timeline.

(With inputs from agencies.)