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Supreme Court quashing Reserve Bank circular not to dilute insolvency law: Corporate Affairs Secretary

New Delhi: The Supreme Court's decision to quash the RBI circular on referring defaulting companies for insolvency proceedings does not in any manner dilute the Insolvency and Bankruptcy Code (IBC), a senior official said Thursday.

Corporate Affairs Secretary Injeti Srinivas also said a generic instruction, one size fits all, that if the resolution does not take place within 180 days then on the 181st day, the banks have no other option but to go to the NCLT has been declared ultra vires.

Under the Code, insolvency proceedings can be initiated only after getting approval from the National Company Law Tribunal (NCLT).

 Supreme Court quashing Reserve Bank circular not to dilute insolvency law: Corporate Affairs Secretary

File image of the Supreme Court of India. PTI

The Supreme Court's judgement in no way dilutes the scope or efficacy of the Code. It does not in any manner dilute the Code, he said on the sidelines of an event in New Delhi.

With the circular issued on 12 February, 2018, the Reserve Bank of India (RBI) replaced various debt restructuring schemes with a harmonised and simplified generic framework for the resolution of stressed assets.

The circular was quashed by the court on Wednesday.

Speaking at industry body CII's Annual Session in New Delhi, Srinivas said building trust is the core issue for governance.

Corporate scandals in the past few years have raised issues of corporate governance. Building trust is the issue for governance, and trust is a cross-cutting issue in the internal and external environment, he was quoted as saying in a release.

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Updated Date: Apr 05, 2019 11:35:29 IST

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