Parl panel pitches for transparent system to track time taken for insolvency resolution cases

New Delhi, Mar 19 (PTI) Amid instances of long delays in some insolvency cases, a Parliamentary panel on Wednesday asked the government to put in place a transparent system to track the time taken for the resolution of cases and also have a central online portal for direct submission of resolution plans.

The Insolvency and Bankruptcy Code (IBC) provides for a time-bound and market-linked resolution of stressed assets. However, there are multiple instances where the resolution of cases has faced long delays due to various reasons.

While significant progress has been made in improving the resolution of distressed corporate assets under the IBC, the Parliamentary Standing Committee on Finance said persistent challenges such as conflicts of interest, lack of transparency and delays in the resolution process, continue to hinder the full effectiveness of the Code.

Against this backdrop, the panel has recommended the implementation of a transparent system to track the time taken for case resolution, with a focus on monitoring instances where statutory timelines are violated.

"This could be done by providing a tabular format showing processing times, infringements, and delays to assist in better policy decision-making," the committee said.

In its report on the ministry's Demands for Grants for 2025-26 tabled in Parliament on Wednesday, the panel also asked the corporate affairs ministry to implement a direct submission system for resolution plans through a central online portal.

"This would ensure that sensitive information remains confidential, preventing any undue advantage for parties involved," it said and added that complaints against resolution professionals should be addressed promptly to ensure accountability.

Another recommendation of the panel is to review the structure of the Committee of Creditors (CoC) to ensure that operational creditors are adequately represented, as their interests are often overlooked.

The CoC is a key element in the insolvency resolution process.

Among others, the panel has recommended setting up a dedicated ESG (Environment, Social, and Governance) oversight body within the ministry as it mentioned that there are several challenges that remain that hinder the full effectiveness of the country's ESG framework.

"This body would be responsible for monitoring ESG disclosures, ensuring compliance with reporting standards, and introducing penalties for greenwashing," the report said. PTI RAM MR

Source: PTI