The Parliament has passed the Insolvency and Bankruptcy Code Bill, 2016. It was first passed in Lok Sabha and later in Rajya Sabha in the month of May, 2016. The code seeks to ensure time-bound settlement of insolvency, faster turnaround of businesses and create a unified data base of serial defaulters
The Code will consolidate and amend existing laws related to insolvency resolution and reorganization of corporate persons, partnership firms and individuals in a time bound manner. It provides for setting up Insolvency and Bankruptcy Board of India (IBBI) to regulate professionals, agencies and information utilities (IUs) engaged in resolution of insolvencies of companies. It also provides for establishment of National Companies Law Tribunal (NCLT) and Debt Recovery Tribunals (DRT) as nodal adjudicating authorities for resolution of insolvency, liquidation and bankruptcy. As per the code, in case of insolvency the interest of the workers must be fully protected and they should be given dues for 24 months. The code seeks to give a push to the ease of doing business in the country.