After the Insolvency and Bankruptcy Board (ISB) amendments under the consideration of Parliament come into force, the government may look at drafting a separate legislation for handling insolvency of urban local bodies (ULBs) and municipal corporations (MCs), official sources told FE.

The move is intended to inspire confidence among lenders to these entities, which play a critical and rising role in city infrastructure creation, besides being responsible for provision of public services relating to water supply, sanitation etc.

“Currently, the creditors are sceptical of lending money to municipalities which is affecting their ability to undertake capital expenditure. A dedicated insolvency legislation will lower the risk for lenders who would be willing to lend to them at lower rates. Fo

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