IBBI Amends Regulations to Expedite Liquidation Process
The Insolvency and Bankruptcy Board of India (IBBI) has amended the regulations to expedite the liquidation process, information utilities and resolution process for corporates on November 18, 2020.
Highlights
Under the amended regulations, the concerned liquidator has been allowed to transfer a ”not readily realisable asset” to any other person, The transfer would be done after consultations with the stakeholders consultation committee. This will facilitate the faster completion of liquidation process.
Amendments
- Under the amended regulation, creditor can assign or transfer the debt to any other person in accordance with the laws.
- The regulation also provides for the information utilities to disseminate a public announcement to its registered users. These users are the creditors of the corporate debtor undergoing insolvency proceedings.
- For the financial creditors who seeks to initiate the insolvency proceedings against a corporate debtor, the IBBI has specified two more record or evidence of default-
- certified copy of entries in bankers book and
- order of a court or tribunal that has adjudicated upon the non-payment of a debt.
Not readily realisable asset
Any asset included in the liquidation estate which could not be sold through available options are called “not readily realisable asset”. It include contingent or disputed assets. It also comprise of the assets underlying proceedings for preferential, undervalued, extortionate credit and fraudulent transactions.
Insolvency and Bankruptcy Board of India (IBBI)
IBBI is the regulator to oversee the insolvency proceedings and entities such as Insolvency Professional Agencies (IPA), Insolvency Professionals (IP) and Information Utilities (IU) in India. IBBI was established on October 1, 2016. It has been provided with the statutory powers by the Insolvency and Bankruptcy Code passed on May 5, 2016. IBBI covers Individuals, Limited Liability Partnerships, Companies and Partnership firms.