Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021

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President Ram Nath Kovind passed the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 on 4th April, 2021.

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The cabinet approved the proposal to amend the Insolvency and Bankruptcy Code, 2016 and brought Insolvency and Bankruptcy Code (Amendment) Ordinance, 2021 on 31st March.

The amendment will provide systematic possible insolvency resolution structure for MSMEs to ensure quick, cost-effective, value maximizing outcome for all stakeholders in such a manner that will be least disruptive for the continuation of MSMEs businesses and which preserves jobs. It is expected that this insolvency resolution will mitigate the distress caused by COVID pandemic.

It also ensures optimistic signal to the debt market, safeguarding employment, ease of doing business and preservation of enterprise capital.

Other benefits of amended code is lesser load on adjudicating authority, unfailing continuity of business operations for corporate debtor, less process costs and maximum assets realization for financial creditors and guarantee of continued business relation corporate debtor and rights protection for operational creditors.

These amendments have been made on the recommendations of Insolvency Law Committee.