Top industry leaders cheer passage of Bankruptcy Code
The new Bankruptcy Code is quite significant as it seeks to provide a framework which will play an extremely crucial role in ensuring insolvency resolution of corporates and individuals, said the CII Director
The proposed bankruptcy law will improve ease of doing business in India by expediting resolution of stressed assets and streamlining the process of liquidating a business, industry said on Thursday.
"It's a historic step taken towards strengthening our ease of doing business in our country. The subject of default has been in news of late and the Code could not have come at a more opportune time, since this subject would also get dealt with through this Code to some extent," CII Director General Chandrajit Banerjee said.
"The new Bankruptcy Code is quite significant as it seeks to provide a framework which will play an extremely crucial role in ensuring insolvency resolution of corporates and individuals in a time bound manner and will pave the way for capital to flow into our country," he added.
Assocham President Sunil Kanoria said the Bankruptcy Bill would be a game-changer in dealing with failure of enterprise which is part of business risks.
"Smooth exit of one entrepreneur and the entry of the other would mitigate the risks of the lenders and protect interest of other stakeholders. Moreover, national assets, whether in the private or public sector would be dealt with in a more pragmatic way," Kanoria said.
Naresh Makhijani, Partner and Head Financial Services at KPMG in India said it "brings ray of hope for lenders in India for a speedy and meaningful resolution of the burgeoning distressed assets in the Indian banking system".
Varun Gupta, Partner, Deal Advisory at KPMG in India termed the legislation as a huge step towards ease of doing business in India.
However, he said, a significant amount of work still to be done in creating the insolvency practitioners eco-system, the tribunals and the operating guidelines over the next few months, boards of companies will have to start re-examining how they deal with all classes of creditors once the code comes into place.
The Lok Sabha today passed Insolvency and Bankruptcy Code Bill that seeks to update and consolidate existing laws in this regard. Once the Bill becomes a legislation, it will enable faster exits for companies or help them turn around their businesses.
"Industry is appreciative of the swift manner in which the government is seeking to address the issues which will help facilitate ease of doing business. We hope that the Code would attain quick passage in the Rajya Sabha as well," Ficci President Harshvardhan Neotia said.