The Insolvency and Bankruptcy Code is looking like a circus at this point, but it seems to be the only way to get both banks and unscrupulous promoters to behave.
It was supposed to be the magic pill that would revitalise the Indian banking system, curing the $210-billion bad loan problem. Instead, the Insolvency and Bankruptcy Code (IBC) is creating more chaos and confusion rather than clarity and clean-up.
It’s not a joke — the IBC is heralded as the biggest reform in the Indian banking sector thus far. Introduced in 2016, the IBC replaced existing schemes such as Corporate Debt Resolution (CDR) and Strategic Debt Restructuring (SDR). Under the IBC, stressed assets are referred to the National Company Law Tribunal (NCLT) to find a resolution for their insolvency, failing which they will be sent to liquidation. As a first step, in June 2017, the Reserve Bank of India drew up a list of 12 large accounts, which made up 25% of the industry’s gross non-performing assets (NPAs), for resolution under the IBC. It included names such as Essar Steel, Bhushan Steel, Binani Cement among others. A 270-day deadline was set for lenders to find a resolution plan. With deadlines ending this month, we finally have one resolution to show.
Diese Geschichte stammt aus der June 08, 2018-Ausgabe von Outlook Business.
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Diese Geschichte stammt aus der June 08, 2018-Ausgabe von Outlook Business.
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