Parliament passes IBC Amendment Bill

The Insolvency and Bankruptcy Code (IBC) (Amendment) Bill 2017 was passed by Rajya Sabha on Tuesday that aims to keep defaulting promoters out of the resolution process of insolvent companies The bill, which replaces an ordinance, was passed by the Lok Sabha last week. The amendments will be notified after the President gives his assent.The IBC ordinance sought to bar wilful defaulters, defaulters whose dues had been classified as non-performing assets (NPAs) for more than a year, and all related entities of these firms from participating in the resolution process. The bill, however, allows defaulting promoters to be part of the debt resolution process, provided they repay dues in a month to make their loan account operational and the resolution happens within the overall time frame specified in the code.This will help promoters who had submitted resolution plans before the ordinance barred them from taking part in the resolution process of companies.The bill also allows asset reconstruction companies, alternative investment funds (AIFs) such as private equity funds and banks to participate in the bidding process.