Skip to main content

Ease lender approval norms for resolution plans: Govt panel

 Ease lender approval norms for resolution plans: Govt panel 
In a move aimed at ensuring that small creditors do not disrupt the resolution process under the bankruptcy law, a governmentappointed panel has suggested that a revival plan can be approved if two-thirds of the creditors endorse it against the current requirement of three-fourths. 
This is one of the key recommendations proposed by the 14-member panel looking at fine-tuning the Insolvency and Bankruptcy Code (IBC), two senior officials aware of the deliberations told ET. Currently, the resolution professional needs the consent from 75 per cent of the creditors to act upon anything — from day-to-day operations to strategic decisions such as approving or rejecting a resolution plan. 
The reduced approver threshold of 66 per cent of the lenders by loan value would apply, the proposal says, to key resolutions such as appointing, replacing or dismissing a resolution professional, approving or rejecting a resolution plan, and extending the deadline from 180 days to 270 days. 
Day-to-day operations, such as related party transactions, appointment of a lawyer or an advisor, and approval of expenses will now need the consent of just 51 per cent of the creditors against 75 per cent now, according to the recommendations. The 14-member insolvency law committee was set up to identity factors that “impact the efficiency of the corporate insolvency resolution and liquidation framework” and make recommendations to address them.
The Corporate Affairs Secretary Injeti Srinivas told ET in an interview separately that the recommendations along with draft amendments to the IBC are likely to be presented toward the end of the month. "…This will speed up the resolution process.
In India, where the borrowing and number of lenders for each loan are too many, it is difficult to get the 75per cent consent and also meet the 270-day deadline within which a plan has to be approved," pointed out M R Umarji, former executive director of the Reserve Bank of India and a member of the committee that drafted the IBC. 
The Economic Times, New Delhi, 13th March 2018


Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Deposit gush:-CA Institute Bats for Special Audit

Obligation for the Month of April

Event DateActApplicable FormObligation07/04/2017Income TaxForm No.27C (TCS)Submission of Forms received in Mar  to IT Commissioner10/04/2017ExciseER-1Excise Return ER-1 for Non SSI assessees for Mar10/04/2017ExciseER-2Excise Return ER-2 for EOUs for Mar10/04/2017ExciseER-3Submission of Excise Return ER-3 by SSI units for Mar quarter10/04/2017ExciseER-6Excise Return ER-6 by units paying duty >  1 crore (CENVAT + PLA) for Mar12/04/2017D-VATBE - 2Advance information for 2nd fortnight of APR of functions with booking cost > Rs 1 lakh in Banquet Halls,hotels etc. in Delhi15/04/2017Income TaxForm 15CCStatement by Banks etc. in respect of foreign remittances during the quarter15/04/2017D-VATDVAT-20Payment of DVAT TDS for Mar15/04/2017Providend FundElectronic Challan cum Return (ECR)E-Payment of PF for Mar21/04/2017ESIESI ChallanPayment of ESI of Mar (Applicable for Salary upto Rs. 21,000 instead of 15,000 earlier)21/04/2017M-VATMVAT ChallanPayment of MVAT & WCT TDS for Mar21/04/201…