Lok Sabha Question No. 1257 (UNSTARRED), answered on 2018-02-09
Subject: Review of IBC
Ministry: CORPORATE AFFAIRS
Asked by: RAM CHARITRA, VINOD KUMAR BOIANAPALLI

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 1257 ANSWERED ON FRIDAY, THE 9 TH  FEBRUARY, 2018 [MAGHA 20, 1939 (SAKA)]

## REVIEW OF IBC

1257. SHRI RAM CHARITRA NISHAD: SHRI B.VINOD KUMAR:

Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a) whether the Government has appointed a Committee to review the Insolvency and Bankruptcy Code (IBC) to address concerns and remove glitches and if so, the details thereof;
- (b) whether about 300 cases have been admitted for resolution by the National Company Law Tribunal and several of them being pushed by the Government and Reserve Bank of India as the promoters were seen to be dragging revival and if so, the details thereof;
- (c) whether one of the biggest worries of IBC is the treatment of home buyers under it and if so, the details thereof;
- (d) whether the other major concern is related to allowing promoters to bid for a companies or an asset that is being sought to be released and if so, the details thereof; and
- (e) whether the Review Committee sought suggestions from stakeholders to ensure efficient functioning of IBC and if so, the details thereof?

## ANSWER

THE MINISTER OF STATE FOR LAW AND JUSTICE                      (SHRI P.P. CHAUDHARY) AND CORPORATE AFFAIRS

विधि और न्र्ार् एिं कारपोरेट कार्य मंत्रालर् में राज्र् मंत्री (श्री पी.पी. चौधरी)

- (a) Madam, Ministry has constituted Insolvency Law Committee (ILC) vide order dated 16.11.2017 with a view to examine the suggestions received regarding provisions of Insolvency and Bankruptcy Code, 2016 (Code). The ILC shall take stock of the functioning and implementation of the Code, identity the issues that  may  impact  the  efficiency  of  the  Corporate  Insolvency  resolution  and liquidation framework prescribed under the Code and make suitable recommendations to address such issues, with a view to enhance efficiency of the processes prescribed and for effective implementation of the Code.

कारपोरेट कार्य मंत्री

- (b) As on 31 st  December, 2017, 524 cases have been admitted for resolution by various benches of National Company Law Tribunal. Further, RBI has apprised that  it  issued    directions  to  certain  banks  for  referring  12  accounts,  with outstanding  amount  greater  than  Rs.5,000  crore  and  with  60%  or  more classified as non-performing  as  on  31.03.16, to initiate the  insolvency resolution process under IBC.  These 12 accounts constituted about 25% of the gross NPAs of the banking system.  In addition, RBI also issued directions to resolve  certain  other  accounts  within  six  months,  failing  which  insolvency proceedings under IBC will need to be initiated.
- (c)  It is one of the issues which is under examination by the ILC.
- (d)  The concern is addressed by the IBC (Amendment) Act 2018, by which the IBC was  amended  to  further  strengthen  the  insolvency  resolution  process  by prohibiting certain persons from submitting a resolution plan who, on account of  their  antecedents,  may  adversely  impact  the  credibility  of  the  processes under  the  Code  and  further  make  provisions  to  specify  certain  additional requirements for submission and consideration of the resolution plan before its approval by committee of creditors.
- (e)  The ILC has sought suggestions/comments related to provisions of the Code and rules and regulations notified thereunder from stakeholders vide Public notice dated 12.12.2017, upto 10 th January, 2018. The said suggestions/comments will be considered by ILC.

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