· creditors and hence both have the voting

·        
Time
constraint – The 180-day moratorium period may act
as constraint in case of insolvency of large or complex organizations.

·        
Availability
of Professionals – Professionals should be trained
and equipped with the skills required to be an insolvency professional and
carry out the process with integrity

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·        
Synchronization
of Norms – The various policy initiatives of the
RBI such as the CDR, SDR, S4A nee to be aligned with the IBC Code.

 

Analysis
in the Global Context

Indian
insolvency code has many provisions adopted from UK’s insolvency code which is
considered as the best working model of insolvency code but there are also some
differences. In both the codes, there is a provision that both creditors or
debtors can file for the insolvency. In both the regimes, during liquidation
priority is given to the secured and preferential creditors while payment and
before these payments liquidation costs are paid.

In
the UK, the insolvency professional does not require any approvals regarding
the operations of the company during the insolvency process but in India, the
insolvency professional requires to get prior approvals from the creditors for
some actions. In the UK, the insolvency professional has to provide a bond
whose value depends on the value of the asset involved so that he or she does
not get involved in any kind of fraudulent activity but in India, there is no
such provision. Also under the UK regime, only an individual can be insolvency
professional while under India’s regime, insolvency professional can be an
individual or a partner organization. Under the UK’s code, both operational and
financial creditors are included in the committee of the creditors and hence
both have the voting rights during the insolvency process but under India’s
regime, only financial creditors are included in the committee of the
creditors. The India code specifies the moratorium period from 180 days with 90
days of relaxation while in the UK, the moratorium period is not specified.

This
is the data for the time taken to resolve insolvency cases and the rate of
recovery i.e. cents recovered per dollar of loan issued in various countries.

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