Government Appoints Committee to Review IBC law

New Delhi Nov 17: In a move to remove glitches in the law and smooth implementation the government has appointed a committee to review the working of Insolvency and Bankruptcy Code which was formed last year.Currently, the code helps to resolve insolvencies of the companies.

The 14-member committee is headed by corporate affairs secretary I Srinivas, includes Insolvency & Bankruptcy Board of India (IBBI) chairman MS Sahoo, representatives from RBI, department of financial services and external experts.

The main function of the committee is to assess the functioning of the new law and examine issues that could impact the framework prescribed under the law.

Currently, the government has asked the committee to address the three issues so that the law can be made more effective and loopholes are plugged.

# Home buyers: Currently these are not fitting into the financial creditor's group, nor are they part of operational creditors and left them no choice to file Insolvency petition.

# Allowing promoters: IBBI is in a dilemma whether to allow a promoter to bid for the property which is to be resolved.In some cases, promoters were blocked to bid whereas they were allowed

# Finding investors :currently there are no investors for second-or three-tier companies.

# Miscellaneous: To make sure that the failed management is permanently ousted and the new one takes place so that the company doesn't undergo bankrupt once again.