{"id":51756,"date":"2019-08-31T17:28:51","date_gmt":"2019-08-31T11:58:51","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?page_id=51756"},"modified":"2019-08-31T17:28:59","modified_gmt":"2019-08-31T11:58:59","slug":"answered-critically-analyse-the-progress-made-in-resolving-stressed-assets-since-the-enactment-of-insolvency-and-bankruptcy-code-ibc","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-critically-analyse-the-progress-made-in-resolving-stressed-assets-since-the-enactment-of-insolvency-and-bankruptcy-code-ibc\/","title":{"rendered":"[Answered] Critically analyse the progress made in resolving stressed assets since the enactment of Insolvency and Bankruptcy Code (IBC)."},"content":{"rendered":"\n
Demand of the question<\/strong>
Introduction.<\/strong> Contextual Introduction.
Body. <\/strong>Success of Insolvency and Bankruptcy Code (IBC) so far.
Conclusion. <\/strong>Way forward. <\/td><\/tr><\/tbody><\/table>\n\n\n\n

The Insolvency and Bankruptcy Code is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. The bankruptcy code is a one stop solution for resolving insolvencies which previously was a long process that did not offer an economically viable arrangement. The code aims to protect the interests of small investors and make the process of doing business less cumbersome.<\/p>\n\n\n\n

Success of <\/strong>Insolvency and Bankruptcy Code (IBC):<\/strong><\/strong><\/p>\n\n\n\n

  1. The IBC has initiated a cultural\nshift in the dynamics between lender and borrower, promoter and creditor. It\nplayed a critical role in reshaping behaviour of borrowers.<\/li>
  2. Before enactment of the IBC, the\nrecovery mechanisms available to lenders were through Lok Adalat, Debt Recovery\nTribunal and SARFAESI Act. While the earlier mechanisms resulted in a low\naverage recovery of 23%, the recoveries have risen to 43% under the IBC regime.<\/li>
  3. Since enactment of the IBC, India\nsignificantly improved its \u2018Resolving Insolvency\u2019 ranking 108 in 2019 from 134\nin 2014 where it remained stagnating for several years.<\/li>
  4. India won the Global Restructuring\nReview award for the most improved jurisdiction in 2018. <\/li>
  5. An IMF-World Bank study in January 2018\nobserved that India is moving towards a new state-of-the-art bankruptcy regime.<\/li>
  6. Insolvency law has led to stability\nin financial systems.<\/li>
  7. Recovery through the IBC was about Rs\n70,000 crore in fiscal 2019 twice the amount recovered through other resolution\nmechanisms such as the Debt Recovery Tribunal, Securitisation and\nReconstruction of Financial Assets and Enforcement of Securities Interest Act,\nand Lok Adalat in fiscal 2018.<\/li>
  8. The recovery rate is also twice the\nliquidation value for these 94 cases, which underscores the value maximisation\npossible through the IBC process. <\/li><\/ol>\n\n\n\n

    Way forward:<\/strong><\/p>\n\n\n\n

    1. There is need for setting up more\ntribunals in different parts of the country to handle the greater-than-expected\nvolume of cases.<\/li>
    2. IBC must consider that there are\ndistinct advantages if the existing management is allowed to keep running the\ncompany such as knowledge, information and expertise.<\/li>
    3. The banks also must push policy\nmakers towards this move because they\u2019re unlikely to get more if the case comes\nbefore the NCLT.<\/li>
    4. Proactive training of judges,\nlawyers, and other intermediaries is be necessary for effective implementation\nof the code.<\/li>
    5. Technological infrastructure needs\nto be strengthened to avoid any kind of data loss and to maintain\nconfidentiality. <\/li><\/ol>\n\n\n\n

      Given all this, the stressed assets resolution framework in the country is a work in progress. However, proactive seeking and acting on feedback from other stakeholders is needed, as testified by the fact that the IBC has undergone two major amendments already due to various issues and loopholes.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Demand of the question Introduction. Contextual Introduction. Body. Success of Insolvency and Bankruptcy Code (IBC) so far. Conclusion. Way forward. The Insolvency and Bankruptcy Code is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. The bankruptcy code is a one stop solution… Continue reading [Answered] Critically analyse the progress made in resolving stressed assets since the enactment of Insolvency and Bankruptcy Code (IBC).<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":49132,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-51756","page","type-page","status-publish","has-post-thumbnail","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/51756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=51756"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/51756\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/49132"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=51756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}