IBC Bill proposes wider look-back time for preferential transactions

New period will now be counted from date of insolvency initiation, not commencement

- RUCHIKA CHITRAVANSHI

In order to capture a broad range of transactions, particularly those undertaken to exclude assets from the insolvency process, the Insolvency and Bankruptcy Code (IBC) Amendment Bill has amended the look-back period, which will be counted from the initiation of insolvency instead of its commencement.

The Centre on Tuesday introduced the IBC Bill in the Lok Sabha, proposing a wide range of reforms from group and cross-border insolvency to creditor-initiated insolvency resolution process.

The Bill has been referred by the government to a select committee.

In cases where the admission of an application takes longer than 14 days, as required under the Code, the look-back period for preferential transactions may not be able to capture a significant portion of transactions that occurred before the filing of an application.