IBC in severe distress, with poor results
Business India|June 12 - 25, 2023
Is IBC earning a dubious distinction? The much-touted umbrella legislation for insolvency is heading towards becoming a law that is incapable of producing results
LANCELOT JOSEPH, ROMMEL RODRIGUES
IBC in severe distress, with poor results

Yes, under the Insolvency and Bankruptcy Code of 2016 (IBC), a regulator body was set up, and the Insolvency and Bankruptcy Board of India (IBBI), was to perform legislative, executive and quasi-judicial functions with respect to the practitioners and stakeholders. Steps were taken to set up institutional infrastructure with the national Company Law Tribunal (NCLT) being notified as the adjudicating authority for the corporate insolvency and bankruptcy cases. And this has now been talked about as an exercise in futility for lenders. It is mired in excessive delays and piling of cases. Also, the lack of the desired number of resolutions and a massive erosion in the recovery values of large non-Performing Assets (NPAs) by defaulting borrowers have been raising very pertinent questions.

Data speaks. IBBI data for the 3,400 cases admitted under the IBC in the last 6 years, shows that over 50 per cent of the cases ended in liquidation, and only 14 per cent could achieve a proper resolution, which is the primary objective. While the situation was better in 2016 and 2017, since 2018, a majority of the cases ended in liquidation in most quarters, while cases for which resolution plans were approved ranged between 15 per cent and 25 per cent.

Denne historien er fra June 12 - 25, 2023-utgaven av Business India.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra June 12 - 25, 2023-utgaven av Business India.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.