Faster insolvency process proposed with creditor-led resolution framework
A compact process proposed to speed up insolvency resolution can be initiated only by financial creditors having a combined share of at least 51% in debt, according to the draft regulations floated by the bankruptcy regulator. The defaulting firm in such cases must respond within 30 days to lenders’ notice seeking proceedings under the Creditor-initiated Insolvency Resolution Process (CIIRP).
Creditors need only to report to the National Company Law Tribunal (NCLT) and the bankruptcy regulator about their plan to initiate insolvency proceedings in a stipulated format, containing details such as proof of debt and verification of the existence and amount of default, according to the proposal.
