Finmin working on bankruptcy law to fast-track recast of firms

A separate bankruptcy law may be on the cards. Finance minister P Chidambaram has recently flagged this idea to the chiefs of public sector banks, official sources said. The government reckons that a separate bankruptcy law/code and efficient bankruptcy courts would help fast-track restructuring/winding up of indebted companies and prevent deterioration of their assets. Replicating legislation and best-practices in countries like the US is what is aimed at. The Companies Bill, 2013, passed by Parliament recently, deals only with matters involving the formation of a company, its management, accounts and finance, corporate governance, investor protection and accountability issues, apart from matters related to insolvency. There are also a host of other laws, including SICA and Sarfaesi, which are relevant in this context.

Source : Financial Express