SOP to speed up bankruptcy filing soon

Bankruptcy filings and admission may speed up in the near future with the government planning to issue rules on when creditors should initiate the process and how.

- Subhash Narayan

Financial services secretary Vivek Joshi said the government is working on a standard operating protocol (SOP) for creditors to speed up admission, as existing procedures lead to delays sometimes stretching to years.

"We are in the process of finalizing guidelines that will provide a template to bankers in which the bankers are supposed to file their bankruptcy application. A template already exists for such applications where less number of documents are required, but banks make lengthy applications, with the application often running into 2,500 pages or more. This delays the process of admission of cases in NCLT (National Company Law Tribunal) as the court also needs to study all documents before admitting a case under IBC (Insolvency and Bankruptcy Code). This is not required. We are preparing an SOP in terms of what needs to be filed and also provide timelines for completing each step," Joshi said in an interview.