The Bill, prepared by the Ministry of Justice, seeks to amend and consolidate existing laws relating to the rescue and rehabilitation of both individuals and companies, alongside broader insolvency procedures. It aims to modernize the legal structure governing financial distress and debt resolution in the country.
A central feature of the proposed legislation is the establishment of an Insolvency Regulatory Authority, which will be tasked with overseeing insolvency processes and enforcing professional standards within the system. The Authority is expected to strengthen supervision and enhance public confidence in how insolvency cases are handled.
According to the Ministry of Justice, the Bill is designed to strike a balance between providing relief to debtors and safeguarding the rights of creditors. It also includes provisions allowing courts or relevant authorities to issue temporary suspensions on debt repayments under specific conditions, offering individuals and businesses short-term protection during financial restructuring.
The government says the reforms are intended to create a more efficient, transparent, and predictable insolvency regime, aligning Sri Lanka’s framework with international best practices.
The debate in the Parliament of Sri Lanka is expected to continue before the Bill moves to the next stage of consideration.
