Parliament panel suggests online portal for direct submission of resolution plan
The parliament standing committee on finances has proposed a centralized Online Portal for direct submission of resolution plans. This system would ensure the confidentiality of sensitive information, preventing undue advantages for any party involved in the process. This is part of major reforms recommended by the house panel.
The committee in its report says that despite significant strides made by the Insolvency and Bankruptcy Code (IBC) in resolving distressed corporate assets in India, critical gaps remain in functioning of the insolvency ecosystem in India. The committee has identified persistent challenges that continue to hinder the Code’s full effectiveness, including conflicts of interest, lack of transparency, and delays in the resolution process.
To tackle these challenges, the committee has put forward four major recommendations:
- Centralized Online Portal for Resolution Plans: The parliament standing committee has urged the Ministry to implement a direct submission system for resolution plans through a central online portal. This system would ensure the confidentiality of sensitive information, preventing undue advantages for any party involved in the process.
- Strengthening the Role of Resolution Professionals: The committee has called for enhanced standards for RPs, including rigorous certification, specialized training, and independent performance reviews. Additionally, it has emphasized the need for a robust framework to address complaints against RPs promptly, ensuring greater accountability and professionalism.
- Transparent Case Tracking System: To address delays, the committee has recommended the implementation of a transparent system to track the time taken for case resolution. This system would include a tabular format highlighting processing times, infringements, and delays, enabling better policy decision-making and adherence to statutory timelines.
- Reforming the Committee of Creditors (CoC): The committee has proposed a review of the CoC’s structure to ensure adequate representation of operational creditors, whose interests are often overlooked in the current framework.
The parliament panel believes that by addressing these challenges and implementing these recommendations, the IBC can be made more efficient, transparent, and effective in achieving its goals. This would streamline the resolution process; reduce conflicts of interest; and enhance the overall functioning of the insolvency framework which may ultimately boost confidence of investors and support the growth of India’s economy.
Also See: Steps taken by IBBI to strengthen liquidation process
