Time limit to Bankuptcy resolution process may be extended by 60 days
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This could mean more time for the 12 big cases undergoing resolution that were on the first list sent by the Reserve Bank of India (RBI) to banks in June, calling on them to be referred to the National Company Law Tribunal (NCLT). These companies account for about 25% of all non-performing loans.
Apart from this, the government has also reassured investors over concerns such as forest clearances and stamp duty exemptions, telling them these will be addressed and that they should participate in bids for bankrupt companies.
The current law allows a maximum 270 days for resolution — an initial 180 days and 90 days of extra time on top of that. The 270-day deadline for the 12 companies ends in February. The resolution process for the dozen are at various stages, with bids having been submitted for some of them. The extension of 60 days will be provided only to the companies currently under insolvency resolution, the officials said.
The amendments to IBC approved last month made significant changes to the law aimed at curbing promoters of insolvent companies from bidding for them and regaining control. "A lot of due diligence needed to be done as rules were revised after the ordinance," a senior government official told ET. "We can give some more time to account for that."
Ministry of Corporate Affairs (MCA) officials recently met bankers, chairman and managing directors, resolution professionals to discuss time taken for approvals, demands for stamp duty exemption for transfer of insolvent companies, and forest clearance among other subjects. #casansaar (Source - Economic Times)
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