Sweety Stay Original. 142 Questions 116 Answers 102 Best Answers 783 Points View Profile Sweety Asked: August 23, 20202020-08-23T14:34:14+05:30 2020-08-23T14:34:14+05:30In: UPSC MAINS What are the salient features of Insolvency and Bankruptcy Code, 2016? Critically examine the salient features of Insolvency and Bankruptcy Code, 2016. insolvency and bankruptcy codepolity Share Facebook 1 Answer Recent Rajnish Optimist 145 Questions 255 Answers 237 Best Answers 1k Points View Profile Best Answer Rajnish Optimist 2020-08-23T14:41:15+05:30Added an answer on August 23, 2020 at 2:41 pm Salient features of Insolvency and Bankruptcy Code, 2016 are: The Code creates time-bound processes for the insolvency resolution of companies and individuals. These processes will be completed within 180 days. If insolvency cannot be resolved, the assets of the borrowers may be sold to repay creditors. The resolution processes will be conducted by licensed insolvency professionals (IPs). These IPs will be members of insolvency professional agencies (IPAs). IPAs will also furnish performance bonds equal to the assets of a company under insolvency resolution. Information utilities (IUs) will be established to collect, collate, and disseminate financial information to facilitate insolvency resolution. The National Company Law Tribunal (NCLT) will adjudicate insolvency resolution for companies. The Debt Recovery Tribunal (DRT) will adjudicate insolvency resolution for individuals. The Insolvency and Bankruptcy Board of India will be set up to regulate functioning of IPs, IPAs, and IUs. Time-bound insolvency resolution will require the establishment of several new entities. Also, given the pendency and disposal rate of DRTs, their current capacity may be inadequate to take up the additional role. IPAs, regulated by the Board, will be created for regulating the functioning of IPs. This approach of having regulated entities further regulate professionals may be contrary to the current practice of regulating licensed professionals. Further, requiring a high value of performance bond may deter the formation of IPAs. The Code provides an order of priority to distribute assets during liquidation. It is unclear why: Secured creditors will receive their entire outstanding amount, rather than up to their collateral value, Unsecured creditors have priority over trade creditors, and Government dues will be repaid after unsecured creditors. The Code provides for the creation of multiple IUs. However, it does not specify that full information about a company will be accessible through a single query from any IU. This may lead to financial information being scattered across these IUs. The Code creates an Insolvency and Bankruptcy Fund. However, it does not specify the manner in which the Fund will be used. 1 Reply Share Share Share on Facebook Share on Twitter Share on WhatsApp Leave an answerCancel replyYou must login or register to add a new answer. Related Questions What is Pathalgadi? What is Bodo Accord?