Cabinet Clears Ordinance for Changes in Insolvency Code

The Union cabinet has on Wednesday given the authorization for amending the
Insolvency and Bankruptcy Code (IBC) to make more efficient the selection of buyers for
stressed assets, and to make certain rescued companies remain in reliable hands,
as per media reports.

Finance Minster Arun Jaitley stated that certain changes are proposed to the Bankruptcy
Code, through an ordinance that is awaiting presidential consent.
The govt put in place a new bankruptcy resolution rule and empowered the RBI to
nudge banks to take defaulting companies to the National Company Law Tribunal in a
significant attempt to deal with the Rs. 10 trillion bad loans and restructured loans,
choking the banking system.

The ministry has already set up a core-committee consisting fourteen members to
identify and suggest ways to address the issues faced in the implementation of the law.
The Union Cabinet has also approved setting up of the 15th Finance Commission that
will prescribe the modus operandi for devolution of taxes between the Centre and
States for 5 years starting on April 1, 2020.