Economic Affairs Secretary Shaktikanta Das has said that to deal with bankruptcy issue in financial sector, government is planning to introduce a bill for resolution of insolvent financial firms in the second half of the Budget session, scheduled from March 9 and will continue till April 13.
In May last year, Parliament passed the Insolvency and Bankruptcy law code 2016. It proposes to enact a single bankruptcy code and set deadlines for processing insolvency cases, thereby cutting down the time it takes to wind up a company or recover dues from a defaulter. It has proposed a timeline of 180 days, extendable by 90 more days, to resolve bankruptcy cases.
The code will provide a specialised resolution mechanism to deal with bankruptcy situations in banks, insurance companies and financial sector entities. Shaktikanta Das has said that this will contribute to stability and resilience in financial system. India currently ranks 136 in the World Bank's resolving insolvency ranking.