India is waiting for the upcoming Monsoon Session of the Parliament which is scheduled to start on July 19th. The government with all new leadership of Cabinet Ministers is likely to introduce 17 new bills in the Monsoon Session of Parliament.
This includes changes in the Insolvency and Bankruptcy Code (IBC) — replacing the Ordinance enabling prepackaged resolution schemes for micro, small, and medium enterprises (MSMEs) and allowing corporate debtors to propose a resolution plan for the stressed company.
Last year, there were amendments been made which were aimed to fill critical gaps in the corporate insolvency resolution framework as enshrined in the Code, while simultaneously maximising value from the Corporate Insolvency Resolution Process (CRIP), said an official statement, adding “This will enable the government to ensure the maximization of value of a corporate debtor as a going concern while simultaneously adhering to strict timelines.”
The Union Cabinet approved the proposal to carry out 7 amendments to the Insolvency and Bankruptcy Code, 2016 through the Insolvency and Bankruptcy Code (Amendment) Bill, 2019.
Listing the salient features of the seven amendments to the Insolvency and Bankruptcy Code, the statement says: “Clarity on allowing comprehensive corporate restructuring schemes such as mergers, demergers, amalgamations, etc., as part of the resolution plan.”
According to the statement, Greater emphasis on the need for time-bound disposal at the application stage. A deadline for completion of CSRP within an overall limit of 330 days, including litigation and other judicial processes. Vote of all financial creditors covered under section 21 (6A) shall be cast in accordance with the decision approved by the highest voting share (more than 50 per cent) of financial creditors on present and voting basis.
Besides, IBC Bill, this monsoon session is also likely to introduce the Deposit Insurance Bill, increase insurance cover to Rs 5 lakh.
However, an most interesting wait from techies and fintech companies, the much-awaited cryptocurrency Bill has been delayed and is not listed in the Lok Sabha Bulletin of the session.
The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 (Crypto Bill), was earlier listed for the Budget Session but couldn’t be tabled as the session was truncated because of the second wave of Covid-19. However, sources said the government is yet to finalise the contours of the Bill and is still evaluating the framework.
Of the 17 new bills lined up for the session are amendments in Limited Liability Partnership (LLP) Act, the Electricity Act and the Coal Bearing Areas (Acquisition and Development) Act, apart from others.
According to the Lok Sabha bulletin, the amendment in the IBC is to replace the April Ordinance, which was promulgated to provide speedier, cost effective, semi-formal and less disruptive framework for insolvency resolution of corporate debtors in distress. The minimum threshold of default will be announced as part of the regulation. The prepackaged scheme has given a semi-formal structure to the pre-insolvency stage.
The objective of the Deposit Insurance and Credit Guarantee Corporation Bill is to provide depositors easy and time-bound access to their hard-earned money and to further instill confidence about the safety of their money. This follows the Budget announcement of 2020, where the Centre approved an increase in cover from Rs 1 lakh to Rs 5 lakh.
The crucial amendment to the LLP Act, 2008, will also be taken up. The government is planning to decriminalise 12 compoundable offences that deal with procedural and technical violations. This is to ensure ease of doing business for law abiding LLPs.
Reference: Business Standard Report