Insolvency and Bankruptcy Code amended in seven ways

New Delhi, July 17(HS) The Insolvency and Bankruptcy Code(IBC) has been amended by the government in seven ways and were cleared by government on Wednesday. These amendments to the IBC Code have been approved by cabinet and the same will be put into parliament for finalization. The updated IBC Code aims to ensure adherence to strict time frame for saving business entities during insolvency process and maximise value of insolvent firms as a going concern.

In these amendments, the maximum bankruptcy resolution period has been extended from 270 days to 330 days. The clarity about rights of financial creditors not favoring resolution plan and rights of operational creditors in the payments hierarchy of resolution plan has also been sought in amendments. The payments towards financiers of resolution process, employees outstanding salary and secured creditors have been equal weightage on priority basis in liquidation process.

According to code, the resolution plan under IBC Code will be binding for central, state and local government bodies that are creditors to the firm.