IBC is hitting at the idea of a welfare state by ignoring possible recovery chance of a stressed company

Enterprises, with consistent track record of making profits, when adversely affected by external factors, are being pushed to insolvency instead of being provided some support to come to tide over the temporary problems.

- Pritha Mishra

There is English saying "A Banker Lends Umbrella When gives loan rather in race when an enterprise is doing well / making profits. It call backs the loan when it is in loss.

Banks do not make proper analysis of the potential of the industry, historical position of the industry, global factors, internal factors, government policies, external factors, etc.

As advised by the regulator Reserve Bank of India, they want to keep their Balance Sheet clean and show high profit.

To maintain a clean image, they go through insolvency and bankruptcy process in case of delays and temporary default in payments instead of restructuring and giving moratorium.