The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019 was first introduced in the Rajya Sabha. The famous Finance Minister Nirmala Sitharaman introduced this bill. The date was in July of the year 2019. This bill and its concept are an important aspect of Indian polity. In this study, the discussion will be done on the present concept, objectives of this bill, the changes that have been made in this bill, and the impact of the insolvency code.  

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What is the Concept of Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019?

The concept of the bill and its research regarding the present matter says that the Rajya Sabha introduced it. The bill helps to amend the code of insolvency and bankruptcy of the past year 2016. Later it can be seen the finance minister introduced a bill or amendment regarding this in the year 2019. In this factor, it is important to note that insolvency refers to a situation. In this situation, a company or an individual is not able to repay debt. On the other hand, code in the field is a time-bound process for the solution of the companies as well as the individuals. This code provides an application for the financial creditor for the initiation of the process of insolvency resolution.     

Objectives of the Insolvency and Bankruptcy Code Amendment

The present code amendment had some objectives. It helps to increase the availability of credit. This is the bill that also helps to balance the interest of the stakeholder. A balance is maintained in order to give priority of payment to the government dues. The objective of this present code also includes the establishment of the Bankruptcy and Insolvency Board of India. It is used as a regulatory body of the present matter. This law is considered to be related to the recognition and insolvency resolution of the corporate persons in this matter. It helps to promote entrepreneurship, and in the availability of balance and credit in this matter. The main objective of this act also includes the distribution of the assets among the creditors to prioritise their performance. Therefore, it can be said that these all are the objectives of the present matter.  

Key Changes Made in the Insolvency and Bankruptcy Code

The Insolvency Law Committee makes the changes in this code. The changes include-

• A swifter admission process
• Limitation in time for the acceptance of resolution plan
• Change in more stringent measures against the wrongful trading and transductions

It can be seen that the insolvency includes the resolution process of the disposal of the applications. The wrongful trading and the transactions can be avoided after the approval of the transactional plan. In this factor it is proposed by committee and a clarification regarding the code is made that informs about the continuation of the process. Change in the resolution plan is also made in this factor so that the committee and its creditors should not be delayed.  

Impact of the Insolvency and Bankruptcy Code

The survey report of Economy 2020 says that the code of bankruptcy and insolvency helps to improve the process of resolution in India. It is better compared to the other mechanism that was made earlier. The various impacts in this field also include the improvement of the financial system. It has been seen that the present code will create a deterrent in the system. The use of this system can help in releasing the locked resources for other productive lending. The impact of this matter can go to the growth of loans, profitability, and employment.  The impact of this code goes to the importance of this matter. 

Conclusion 

The bill was an important aspect of the Indian polity and it dealt with the matter of bill insolvency. It is considered to be a timely process for the salvation of insolvency among individuals as well as in companies. The concept of the objectives makes the study enrich the matter in a great way. It is also an important part of this study and the challenges in this factor are also essential. The readers can get a detailed description of the bill through this study.