The Insolvency and Bankruptcy Code possess the essential elements and practices for better revival of financial institutions which are under stress. Elucidate (200 Words)
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IAS Parliament 6 years
KEY POINTS
· Revival of ailing firms, the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (Code) have returned 210 per cent of liquidation value for creditors.
· The Code provides a timeline of 180 days to conclude a corporate insolvency resolution process (CIRP), extendable by a one-time extension up to 90 days.
· The insolvency resolution process cost, which includes fee of insolvency practitioner and other professionals, and expenses related to meetings of committee of creditors (CoC), public announcements, filings and litigations, etc., have been 0.5 per cent of the realisation by the creditors in contrast with a cost of 9 per cent under the previous insolvency framework.
· The Code has become the preferred mode for insolvency resolution of a defaulting firm.
· The Code has proved to be an efficacious remedy even for loan recovery.
· An insolvency practitioner manages the affairs of the firm as a going concern and protects and preserves the value of its property.
· The Code envisages a resolution plan for reorganisation of a defaulting firm.
· Any creditor may seek any information about the firm’s business and financial affairs from the insolvency practitioner.
· Any creditor may contest the decision of the insolvency practitioner accepting or rejecting its own claims or claims of other creditors.
vivek attri 6 years
Kindly check my answer
IAS Parliament 6 years
Try to include about reduction in cost, time, effecient loan recovery etc. Keep Writing.
