The Associated Chambers of Commerce & Industry of India

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Need to make IBC more effective, says official

 

Wednesday, September 12, 2018

 New Delhi, 12th September, 2018: Insolvency & Bankruptcy Code (IBC) has simplified a lot of things, but a lot more needs to be done, Ms. Vinita Srivastava, Joint Secretary who had directly dealt with bankruptcy procedure said at an ASSOCHAM Insolvency & Bankruptcy Code summit held in New Delhi today.

Ms. Swarupama Chaturvedi, Advocate-on-Record, Supreme Court of India said, litigation though expensive, is playing a constructive role in growth of The Insolvency & Bankruptcy Code (IBC). ‘Insolvency professionals must always ensure professional ethics are upheld’, said Ms Chaturvedi.
Sharing his perspective, ASSOCHAM's secretary general, Mr Uday Kumar Varma said, "To say that the Insolvency and Bankruptcy Code, 2016 is a game changer or a path-breaking initiative is an understatement."
 
He added, "It is indeed so because this is for the first time that we have a sound legal framework and also administrative structures in place."
 
He further said that the one fundamental difference that the IBC had made was that it has changed the bargaining equation between the debtors and the creditors.
 
"Prior to this code this bargaining equation was loaded in favour of debtors, IBC has made this transformational change where the bargaining equation is now more in favour of creditors, that is a very fundamental advantage," said Mr Varma.
 
The second very important aspect of this whole thing, he said is that there are definite timelines. "It gives a physical timeframe within which resolution has to be made."
 
He also said that there is a strong legislative basis to carry out the resolution process, which is essential to bring about such large-scale changes.
 
Mr Sachin Gupta, Sr. Director, CRISIL Limited, the timing of the code is opportune because of the large level of non-performing assets (NPAs) plaguing the financial sector in India. The objective of this code is to resolve the problem of NPAs in a faster manner and enhance efficiencies in the financial ecosystem.
 
 
Currently, about a third of India’s gross non-performing assets have already been referred to National Company Law Tribunal (NCLT) under IBC. This number is expected to go up further with expectation of faster resolution of cases under IBC mechanism, said Mr. Gupta.

However, government has been proactive in taking feedback from the stakeholders and acting upon them. As a result, the code has undergone two major amendments. These amendments in the code will support the overall governance framework and quicken the resolution of NPAs, he added.
 
Mr. Sanjay Gupta, Director, IPA ICAI said, the recent amendments to IBC are an earnest attempt to address a number of issues faced in the ongoing stressed assets cases and will help reduce timelines, enhance transparency and improve realisations from their resolution. Further, a conducive ecosystem is being developed in the backdrop to quicken the resolution process.
 
 
About ASSOCHAM:
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations, and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on www.assocham.org
 
For further details, please contact:
 
Manju Negi
AVDHESH SHARMA   
ASSOCHAM
ASSOCHAM   
011-46550509; +919810910911
011-46550508; +918527639419
 

 

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