The Indian government has announced significant reforms to the country’s financial regulatory framework.
Finance Minister Nirmala Sitharaman, during her presentation of the 2024-2025 Union Budget, outlined several key initiatives designed to strengthen the Insolvency and Bankruptcy Code (IBC) and improve the ease of doing business in India.
Central to these reforms is the proposed establishment of an Integrated Technology Platform, which aims to bring greater consistency, transparency, and oversight to the insolvency resolution process. This digital initiative is expected to benefit all stakeholders by streamlining procedures and accelerating case processing times.
Nirmala Sitharaman highlighted that IBC has resolved more than 1,000 companies, resulting in a direct recovery of over Rs 3.3 lakh crore to creditors. In addition, 28,000 cases involving over Rs 10 lakh crore have been disposed of, even before admission.
To further expedite insolvency resolutions, the government plans to implement reforms to strengthen both the tribunal and appellate tribunal systems. This includes the creation of additional tribunals, some of which will be dedicated exclusively to cases under the Companies Act.
Industry experts have welcomed these proposed changes. Samir Sheth, Partner & Head of Deal Advisory Services at BDO India, commented on the potential impact of the new tribunals, stating, “Setting up additional tribunals to deal with IBC cases is a welcome step that will expedite the resolution process.”
Ramesh K. Vaidyanathan, Managing Partner at BTG Advaya, praised the decision to strengthen the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), noting that these measures “will help to improve recovery of stressed assets.”
“The decision to earmark some of the tribunals exclusively to cases under the company’s law is to be welcomed. Needless to add, a lot will depend on ensuring that vacancies are filled up faster and competent members are appointed, an aspect that has weighed the system in the recent past,” added Ramesh K. Vaidyanathan.
(Inputs from ANI)