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Government Forms Committee to Review Insolvency and Bankruptcy Code, 2016

The Ministry of Corporate Affairs vide notification dated 16.11.2017 has ordered to constitute a 14 member committee to review and improve the implementation of Insolvency and Bankruptcy Code, 2016. The committee will be led by I. Srinivas, Secretary at Ministry of Corporate Affairs, M.S. Sahoo, Chairperson at Insolvency and Bankruptcy Board of India, Representatives from Reserve Bank of India and department of financial services and other experts.

The committee will look into the functioning and implementation of the Code, identify the issues that may impact the efficiency of the Corporate Insolvency Resolution and Liquidation framework prescribed under the Code.

The committee will make recommendations to address the issues, to enhance the efficiency of the processes prescribed and for effective implementation of the Code.

As per the notification the committee shall be at liberty to invite or co-opt practitioners, experts or individuals who have knowledge or experience in insolvency, law or economics and Representatives from other regulators or ministries. It may also consult stakeholders as part of its deliberations.

The non-officials members of the committee will be eligible to travelling and other allowances as per government instructions and the secretarial support to the committee will be arranged by Ministry of Corporate Affairs/Insolvency and Bankruptcy Board of India, the notification said.

West Bengal Essential Commodities Supply Corporation Becomes First PSU To Resolve Debt Under New Bankruptcy Law

National Company Law Tribunal Kolkata Bench has approved the Resolution Plan for loans that remained Non-Performing Assets in the books of lenders for the past five years.

A petition u/s 7 of the Insolvency and Bankruptcy Code, 2016 was filed by the Bank of Maharashtra against the West Bengal Essential Commodities Supply Corporation Ltd. The said petition was admitted by the NCLT Kolkata Bench and Corporate Insolvency Resolution Proceeding was ordered against the Company in May 2017.

West Bengal Essential Commodities Supply Corporation (WBECSC), the state's special purpose vehicle to procure paddy and other food grains from farmers at fair price, has paid about Rs 186 crore as per the debt resolution exercise, marking a major success of the Insolvency and Bankruptcy Law. It possibly becomes the first government owned company to resolve credit disputes under the new bankruptcy law, settling Rs 360 crore loans from nine banks namely State Bank of India, Union Bank of India, Allahabad Bank, UCO Bank, Bank of Maharashtra, Canara Bank, Central Bank of India, Oriental Bank of Commerce, and Syndicate Bank.

The process got over within the stipulated 180 days, signaling a huge success as government-run enterprises typically need approvals at multiple levels. According to the Resolution Professional the settlement will also help the company to raise a fresh Rs 1,000 crore of bank loans, which can be deployed for the welfare of farmers.

22 November 2017
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