Parliament Debates Landmark Insolvency Bill to Resuscitate Distressed Businesses 📈

The Government has commenced the Second Reading of the Rescue, Rehabilitation and Insolvency Bill, a major overhaul of the 1853 Insolvency Ordinance. Developed with IMF and World Bank assistance, the law shifts focus from liquidation to business rescue. • Key Provisions Introduces court-supervised debt restructuring and moratoriums on creditor action. Establishes a regulatory authority for insolvency proceedings and professionals. Aims to reduce Non-Performing Loans (NPLs) and prevent "asset grabbing" during financial distress. • Targeted Relief for MSMEs & Individuals Low-income debtors: Protection for those with liabilities below Rs. 2 Mn and monthly surplus income under Rs. 100,000. MSMEs: Court-approved restructuring available for entities with liabilities under Rs. 50 Mn. Provides a legal path for debt cancellation upon successful rehabilitation. • Challenges & Opposition Views Critics argue the proposed 60-day proceeding timeline is unrealistic due to judicial delays; a 180-day window is suggested. Concerns remain that existing Parate Execution powers (debt recovery without court intervention) may undermine the new rescue framework. Calls for specialized commercial courts to ensure the SME sector—comprising 60-65% of businesses—is adequately protected. _Status: Based on ongoing Parliamentary debate data._