Synopsis: IBC is a landmark reform and its efficiency can be further enhanced by adopting incentive structure. Introduction Despite value erosion at disbursal due to poor credit discipline, the IBC has yielded impressive recoveries so far. However, the Code has also been criticized on several other grounds, many of which are questionable. Why IBC ‘s… Continue reading Let’s rework incentive structures to boost IBC recovery
Synopsis: The Insolvency and Bankruptcy Code (IBC), which was promoted as a panacea to the problem of bad loans, has been attacked as being ineffective at best and counterproductive at worst. It requires a more nuanced debate. Introduction In recent months, a landmark economic reform of the last decade has come under criticism from various… Continue reading Criticism of the IBC’s recovery record is unwarranted
Synopsis: Regulator’s proposal for code of conduct for the Committee of Creditors (CoC) deserves scrutiny. Introduction The Insolvency and Bankruptcy Board of India (IBBI) has issued a discussion paper on the corporate insolvency resolution process and invited comments on its suggestions. What is the issue? CoC is unregulated, since the members of the CoC are… Continue reading Another IBC fix? (On a Code of Conduct for CoC)
Source: This post is based on the article “Integrity of insolvency processes: A tough ask” published in Live Mint on 2nd September 2021. Syllabus: GS3- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment Relevance: Role of Insolvency bankruptcy code in maintaining the health of financial institutions. Synopsis: Issues hampering the… Continue reading Integrity of insolvency processes: A tough ask
Source: Live Mint Relevance: IBC process is one of the most important aspects of industrial growth. Synopsis: IBC Process has been a mixed bag of achievements and challenges. This article highlights issues and achievements of, and ways to improve the IBC process. Recently, the chairperson of the standing committee on finance, Jayant Sinha informed parliament… Continue reading HAS IBC DELIVERED ON ITS LOFTY PROMISE?
Source: Business Standard Relevance: Issues related to banking sector in India Synopsis: In managing the bad loan problem, IBC should be the last resort for banks. Context The Standing Committee of Parliament attached to the Ministry of Finance has taken stock of The Insolvency and Bankruptcy Code and made suggestions for improvement. Different models of… Continue reading Bad loans: Prevention is better than cure
Source: Live Mint Synopsis: An examination of the IBC’s record on resolving cases of business insolvency reveals greater success than critics acknowledge Background Analysis of IBC’s performance: Added points A good insolvency system cannot be judged by the number of companies being liquidated. Because the purpose of insolvency law is to swiftly liquidate firms that… Continue reading Our bankruptcy code deserves credit for what it has achieved
News: The Ministry of Corporate Affairs(MCA) has set up a committee to look into the possibility of including “pre-packs” under the current insolvency regime to offer faster insolvency resolution under the Insolvency and Bankruptcy Code (IBC), Facts: Pre-Pack: It is a pre-planned process in which a financially distressed company and its creditors reach an agreement… Continue reading Explained: What are pre-packs under the present insolvency regime?
News:The Union Cabinet has approved the amendments in the Insolvency and Bankruptcy Code, 2016 through the Insolvency and Bankruptcy Code (Second Amendment) Bill,2019. Facts: About Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. The amendments aim to remove certain difficulties being faced during insolvency resolution process to realise the objects of the code and to… Continue reading Cabinet approves Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019
News:The Ministry of Corporate Affairs (MCA) has notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules,2019. Facts: About the rules: The rules allow the insolvency and liquidation process to be undertaken against systemically important financial service providers(FSP) so long as such proceedings are triggered by… Continue reading Govt notifies rules under insolvency law for resolution of financial service providers