The main modifications to the Insolvency and Bankruptcy Code (IBC) to approve the so-called ‘pre-pack resolution plan for Micro, small and medium enterprises (MSMEs) and alterations in banking laws to help privatization figure on the economic agenda for the monsoon period of Parliament, arranged between July 19 and August 13.
The government will also pursue Parliament’s nod for the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill to provide time-bound entry to depositors for their insured amount of Rs 5 lakh if banks move ahead. It will also institute a Bill to de-license the power dispersal business and permit any establishments to engage with the distribution companies (discoms) anywhere in the country to enhance the competition.
The government altered the IBC through an Ordinance in early April to arrange in the pre-pack resolution plan for MSMEs and under which only the debtor will get to activate its own procedures of bankruptcy. The recent scheme could yield much faster resolution than the corporate insolvency resolution process (CIRP) and chop costs and analysts compute. And the promoters can also pursue to run the MSMEs, contrasting in the CIRP where the resolution professional obtains to move the affairs with the directions from financial creditors. And it will also decrease the legal actions, often activating by reverting promoters to sustain control of their firms, and aid the thousands of MSMEs who are fighting to cope up with the destruction work by the Covid-19 pandemic.
And it’s sources pointed out that even though the important Bills are not listed in the first list of 17 Bills for deliberation and passing in the session and the government will either alter or revoke the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980 (Nationalisation Acts). Then the voting rights cap of 10% for a non-government shareholder without considering her shareholding is an obstacle for privatization of public sector banks. The finance minister Nirmala Sitharaman in the Budget FY22 speech declared that the government’s scheme to privatize two public sector banks and one general insurance company in the present financial year. And it has been announced that the Central Bank of India and Indian Overseas Bank (IOB) will be privatized this year and in sync with Niti Aayog’s proposals, but there is no official term yet.