Insolvency law to protect workers’ rights

It would also bring down drastically the time taken to wind up a sick company while making the entire process much easier, the Minister of State for Finance said. “The bankruptcy law is going to enable the recovery process to move much more smoothly and effectively,” Sinha told PTI here.

Both Houses of Parliament within days passed the Insolvency and Bankruptcy Code last week to unify more than four overlapping sets of about a century-old laws to improve ease of doing business in the country. 

The new law empowers employees, creditors and shareholders to initiate winding up process at the first sign of financial stress like a serious default on repayment of a bank loan. 

Once they trigger the clause, the matter goes to a 180-day resolution process, which can be extended by another 90 days by the adjudicator.