In the upcoming winter session of Parliament, the central government is set to propose significant legislative reforms to strengthen the economy. Among these are amendments to the Insolvency and Bankruptcy Code (IBC), expected to introduce an out-of-court settlement process, and updates to the Companies Act to streamline corporate governance, according to reports. The session is likely to run from November 25 to December 20.
The proposed IBC amendment bill aims to introduce a “Creditor Led Resolution Process” (CLRP), designed to accelerate the resolution of insolvency cases by reducing the role of the adjudicating authority. Unlike the Corporate Insolvency Resolution Process (CIRP), which typically spans 330 days, the CLRP would be led by financial creditors and has a targeted completion timeline of 165 days. The new process would bypass the admission stage, only notifying the National Company Law Tribunal (NCLT) and the Insolvency and Bankruptcy Board of India, and would require NCLT intervention solely for final approval of the resolution plan. This streamlined approach is expected to reduce the caseload on tribunals and expedite insolvency resolutions.
While cross-border insolvency norms and project-wise insolvency for real estate were previously under consideration, these provisions are unlikely to be included in the current bill. However, the IBC amendment is positioned as a top legislative priority for the Ministry of Corporate Affairs, aiming to enhance efficiency in the insolvency process and facilitate quicker resolutions for creditors.
Insurance reforms
The Centre is set to introduce a bill aimed at implementing significant reforms in insurance laws during the upcoming session. The proposed changes include raising the foreign direct investment (FDI) limit from 74% to 100% and introducing composite licensing for both life and non-life insurance.
Additionally, the government is expected to introduce the Companies (Amendment) Bill 2024 to modernize corporate operations and improve governance standards. Proposed changes include simplifying the borrowing process for listed companies, establishing mechanisms to enforce settlements for dissenting creditors, enhancing auditing standards, and easing procedures for relocating registered offices across states.
