The Insolvency and Bankruptcy Code (IBC) transformed India's approach to corporate financial distress. Once, it was said that India transitioned from "socialism without an entry" to "capitalism without an exit" for businesses. This paradigm shifted with the introduction of the IBC, which provided a much-needed mechanism to address insolvency issues in a time-bound and efficient manner. Passed in May 2016, it has played a transformative role in the Indian economy. At the time of its enactment, we were grappling with a twin balance sheet crisis, where banks' non-performing assets (NPAs) were hovering close to 12%. This resulted in the choking of fresh credit, the jet fuel for any economy, stalling economic growth. The IBC emerged as the lighthouse of a new era, resulting in what J. Nariman eloquently paraphrased John Milton to call a "defaulter's Paradise Lost."
It engendered a culture of corporate accountability and credit discipline. Loan contracts regained their sanctity. A behavioral shift occurred for borrowers, who repaid their debt. NPAs are now at a historic low, bank balance sheets are robust, credit is growing at a healthy clip and growth is back on track. The IBC succeeded because the entire ecosystem and institutional infrastructure, from regulators, including the new Insolvency and Bankruptcy Board of India (IBBI), and the legislature to the courts, banks and the market worked for it.
Denne historien er fra December 05, 2024-utgaven av Mint Hyderabad.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra December 05, 2024-utgaven av Mint Hyderabad.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Capex flexibility tops states' budget wishlist
Kerala, Punjab call for special financial packages, higher borrowing limits
'Adani foray into cement drives deep discounts'
Competition in India's cement sector heated up with the entrance of the Adani Group in September 2022, top manufacturers bumped up discounts to maintain market share, according to a report from British wealth manager Investec.
Tata Steel's Dutch plant gets warning
Tata Steel Netherlands will face fines of almost €27 million if it doesn't take measures within eight weeks
Banks win SC relief on 30% credit interest cap
The Supreme Court on Friday overturned the National Consumer Disputes Redressal Commission (NCDRC)'s 2008 decision to cap interest rates on late credit card bill payments at 30% per annum, bringing relief to lenders that had appealed the consumer forum's ruling.
Leave a movie midway, and get some money back
PVR Inox's move is part of efforts to widen audience base and improve movie-going frequency
Claims of Reliance Infratel's indirect creditors upheld
The apex court upheld ₹10,952 crore claims by four indirect creditors of Anil Ambani-led RCom's tower biz
Pushpa 2 most-watched film of 2024, Coldplay hot
Nostalgia also took centre stage with re-releases like Kal Ho Naa Ho, Rockstar and Laila Majnu still drawing viewers
Bombay HC upholds Adani's bid to develop Dharavi slum
The project gained momentum in 2016 under the Bharatiya Janata Party-Shiv Sena led govt
LIVING THE DREAM
The co-founder and CEO of Dream Sports talks about the correlation between academic mediocrity and success, setting the culture at the organisation, and the boom in fantasy sports in India
TKIL in talks with oil, steel cos for green hydrogen plants
TKIL aims for 100 MW electrolyser capacity by 2025 and has allocated ₹1,500-2,000 crore