In a major relief for banks and home buyers, assets of bankrupt companies and their promoters attached by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) can now be restored to affected creditors, following the finalisation of a new standard operating procedure (SOP) jointly framed by the ED and the Insolvency and Bankruptcy Board of India (IBBI).

The IBBI issued a circular on November 4 after “multiple rounds” of coordination meetings with the ED, formalising a mechanism to align insolvency resolution and anti-money laundering processes.

Under the new arrangement, Insolvency Professionals (IPs) will file a “standard undertaking” before the special PMLA court seeking release of assets attached by the ED so they can be restored to rightful creditors —

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