New Delhi, Aug 1 (IANS): Union Finance and Corporate Affairs Minister Nirmala Sitharaman on Thursday said that the amendments to insolvency law will ensure greater timeliness for the resolution process, which has to be completed in 330 days.

Moving the Insolvency and Bankruptcy Code (Amendment) Bill, 2019 for passage in the Lok Sabha, she said the changes would also bring in more clarity on various provisions, including time-bound disposal at the application stage for resolution plan and treatment of financial creditors. The government has made changes in seven sections of the law, she added.

Once the Corporate Insolvency Resolution Process (CIRP) begins, it has to be completed in 330 days, including litigation stages and judicial process, the minister said, about the proposed amendments.

Among other changes, the approved resolution plan would be binding on Central and state governments as well as various statutory authorities.

Sitharaman said the proposed amendments also responds to issues on financial creditors in the wake of a recent ruling with respect to financial and operational creditors.

Recently, the National Company Law Appellate Tribunal (NCLAT) had ruled in Essar Steel Ltd's case that the Committee of Creditors (CoC) had no role in distribution of claims and brought lenders (financial creditors) and vendors (operational creditors) on par.

Sitharaman quoted a Supreme Court judgement to say that with implementation of the Code, it is no longer a defaulter's paradise.

The bill was subsequently passed by the house and has received the Parliament's approval as the Rajya Sabha had passed it on Monday.