Bankruptcy regulator to review process of making rules, seeks suggestions

To set aside part of the year for receiving public comments

In a first of its kind effort by a regulator, the Insolvency and Bankruptcy Board of India (IBBI) is working on a draft proposal to review and monitor its own regulatory process.
 

Having been mandated by the statute to form advisory committees and take stakeholder views, the country's newest regulator is also looking to implement a plan where a certain part of the year would be set aside for receiving public comments.

"In the next two months or so, we will come out with a draft about how to make regulations and that would be in public domain," said MS Sahoo, chairman, IBBI while speaking at an international conference delving on the issue of the new corporate insolvency regime.

Explaining the efforts made by the young regulator to earn credibility and win public confidence, Sahoo said, "We are thinking that whatever regulations we have we should get comments, and if there is an urgency we can make amendments."

He also added that comments can be submitted throughout the year until December following which they will be screened by the chairman and used in the updated version of the regulation, which will be released in April next year. 

The move is inspired by the Reserve Bank's practice of bringing out an annual update of its laws on July 1 every year.

Brushing aside market views that interference of courts should be encouraged in the new regime, Sahoo said that since this was an emerging area, it was important for a third party to address disputes and help in interpretation. He, however, pointed out that courts have played an important role in several other areas of economic legislation over the past 25 years.