In the upcoming winter session of Parliament, the Centre may push some pending legislative reforms to give an impetus to the economy. These include amendments to the Insolvency and Bankruptcy Code (IBC) to introduce an out-of-court settlement process, as well as changes to the Companies Act aimed at streamlining corporate governance. The session is expected to commence on November 25 and conclude on December 20.
Reports suggest that the Centre may introduce a bill focusing on significant reforms in insurance laws during this session, with the goal of further liberalising the sector. Plans include raising the foreign direct investment (FDI) limit from 74% to 100%, alongside introducing composite licensing for life and non-life insurance.
However, it appears the government may not address the National Financial Information Registry (NFIR) Bill, which aims to establish a comprehensive information system for lending institutions to expedite processes and reduce credit costs, according to sources.
A key focus is anticipated to be the long-awaited IBC amendment bill, which may include the introduction of an out-of-court settlement process known as the “Creditor Led Resolution Process (CLRP)” and group insolvency norms. Additionally, the bill is likely to eliminate interim moratorium provisions concerning personal guarantors’ assets. An official indicated, “The amendment bill is a top priority for the Ministry of Corporate Affairs.”
The CLRP would be initiated by financial creditors following a default by the corporate debtor, involving minimal interference from the adjudicating authority (AA) or the National Company Law Tribunal (NCLT). A committee has recommended that the CLRP be completed within 165 days, a significant reduction from the 330-day timeline associated with the Corporate Insolvency Resolution Process (CIRP). Importantly, the admission stage is omitted, as there is no formal admission process—only a notification of initiation to the NCLT and the Insolvency and Bankruptcy Board of India. In this scenario, the NCLT’s role is confined to approving the resolution plan, which is expected to expedite the insolvency process in many cases and alleviate the workload of the tribunals.
While the government previously showed interest in introducing cross-border insolvency norms and project-wise insolvency for real estate, these provisions are reportedly not likely to feature in the new bill.
Additionally, the government may introduce the Companies (Amendment) Bill 2024, aimed at streamlining corporate operations and enhancing governance standards. Likely changes include simplifying the borrowing process for listed companies, establishing a mechanism to enforce a compromise/arrangement for dissenting creditors, streamlining auditing processes, and easing the procedures for shifting registered offices between states.
Among other legislative efforts, the government may table a bill to restore statehood to Jammu and Kashmir, which was designated a Union Territory in October 2019. Furthermore, the Waqf (Amendment) Bill, 2024, aimed at improving the management and administration of Waqf properties in India, is also expected to be taken up.
