IBBI Mulls Project-Wise Insolvency for Real Estate Developers
Why in the news
The Insolvency and Bankruptcy Board of India (IBBI) is looking at letting a single real estate project go through resolution, so buyers in sound projects are spared a builder’s troubles elsewhere.
Key facts
- IBBI is weighing project-specific insolvency resolution for real estate.
- Real estate is over one-third of roughly 8,500 admitted Bankruptcy Code cases.
- Developers would keep separate books of accounts per project.
| Aspect | Present | Proposed |
|---|---|---|
| Resolution level | Whole company | Single project |
| Healthy projects | Buyers face delays and uncertainty | Viable projects carry on |
Significance
Targeted restructuring becomes possible and buyers in non-distressed projects keep their possession timelines.
Exam angle
- Body: Insolvency and Bankruptcy Board of India (IBBI).
- Idea: project-level instead of company-level resolution.