The Insolvency And Bankruptcy Code, 2016- A Step Towards Achhe Din

INTRODUCTION

Indian government's move to enact the Insolvency and Bankruptcy Code, 2016 ("Code") will help in streamlining and consolidating all the laws/legislations regulating insolvency to make the process simpler. The Code has now received President's assent on May 28, 2016. It will provide an easy exit option for insolvent and sick firms. The enactment of Code is an innovative plan awaiting correct execution. The Code creates a unified framework for resolving insolvency and bankruptcy matters and is a key element in the government's strategy to rid the financial sector of its bad debt problem.

The Code will enable quick and prompt action to be taken in the early stages of debt default by a firm, maximising the recovery amount and will extend to individuals, companies, limited liability partnerships and partnership firms in a time-bound manner.