Building soon, a technology backbone for the bankruptcy regime
The Centre is planning to build a common information technology (IT) backbone linking various stakeholders of the corporate turnaround ecosystem to improve the efficacy of debt resolution, two people aware of the matter said. The entities to be connected include the National Company Law Tribunal (NCLT), the Insolvency and Bankruptcy Board of India (IBBI), credit information providers, lenders, distressed businesses ending up in tribunals, and insolvency professionals. National E-Governance Services Ltd (NeSL), India’s first agency registered under IBBI to provide legal evidence on debt to creditors and tribunals, will also be part of this IT network.
The project, which is expected to eliminate information asymmetry among the different agencies, is likely to be announced in Union Budget 2024. “Once the required approvals are in place, bids will be called for building the IT platform," said one of the persons cited above on the condition of anonymity. “The proposed integrated IT platform for case management under IBC (Insolvency and Bankruptcy Code) will help in better monitoring of cases.
Thus, delays will come down. A study is being done on this now. Once implemented, the system will also improve the ease of doing business for insolvency practitioners," said this person, adding that all data will be available in this common system.
Shareholders of companies fiercely contest bankruptcy petitions filed by creditors to avoid losing control over their businesses. Having timely information about the solvency of a business will help the tribunals decide on admission of cases quickly, said a second person who also spoke on the condition of not being named. Queries emailed to the spokesperson for the ministry of corporate
. Read more on livemint.com
