IBC: Climate strategy to be made key to debt resolution

Move could make India a pioneer in making sustainability key to business rescue decisions

- Gireesh Chandra Prasad

Sustainability is set to become a central consideration for debt resolution under the Insolvency and Bankruptcy Code (IBC), in a move that could make India a pioneer in the decision-making process over whether and how to rescue distressed businesses.

Rule-maker Insolvency and Bankruptcy Board of India and the ministry of Corporate Affairs have looked into the proposal, which is at an early stage of ideation but expected to gather momentum in the coming months, said two people informed about the discussions.

To investors in India’s distressed asset market, the deliberations may eventually lead to tweaks in the technical parameters for selecting the winning bidder for a company making its way through bankruptcy proceedings, explained one of the persons quoted above. Both spoke on condition of not being named.