CCI nod must before lenders finalise resolution plan
Lenders will need to seek prior approval of the competition regulator before finalising resolution plans, according to amendments to the Insolvency and Bankruptcy Code (IBC) that were approved by the cabinet on Wednesday. The measure seeks to prevent litigation that can derail the resolution process at a later stage, said a top government official and two bank executives.
The official said Competition Commission of India (CCI) assent will be needed before the committee of creditors (COC) finalises a resolution plan. Currently, the winning bidder approaches CCI for clearance before formally taking over the asset.
The cabinet approved the IBC Amendment Bill 2018 that will replace the ordinance the government had promulgated earlier.
It recognises homebuyers as financial creditors when it comes to bankruptcy proceedings against real estate developers, ensuring some measure of compensation for them.