Kolkata, Amid several setbacks, the Insolvency and Bankruptcy Board of India (IBBI) declared 2023-24 a landmark year with the National Company Law Tribunal achieving a significant 43 per cent increase in resolutions, from 189 cases last year to 125 this year. It's been 200 years. The year has turned 270th.
The IBBI is expected to submit a report to the government in the next 2 months to include "mediation" in the Insolvency and Bankruptcy Code (IBC), which is currently under discussion and scrutiny.
The regulator is also working on prepackaged insolvency for large corporate cases, which has so far been allowed only in MSME cases.
Sudhakar Shukla, whole-time member, IBBI, while addressing the 7th Insolvency N Bankruptcy Code Conclave organized by CII, said, for the first time in a year, the number of outputs has exceeded the number of inputs, leading to a reduction. Number of pending cases across India.
He said that despite the hurdles, resolution of Rs 3.5 lakh crore was achieved in the last seven years and 27,000 applications worth Rs 10 lakh crore were withdrawn, making IBC a powerful tool for debt resolution in the country.Shukla said the law has evolved with time and the interventions made to reform it have been remarkable.
“In 2023-24, around 12 amendments and 86 interventions have been made in the IBBI within a single year. This shows that we are responding to specific needs to bridge the gaps,” he said.
He further said that like real estate, a regional approach has been adopted to address unique problems for quick solutions.
“We are trying to follow a sandbox approach,” Shukla said.The recent amendments were crazy on real estate where project-wise resolution was done, keeping allotted houses from liquidation was a big step forward in the zonal approach."
Speaking about the demand for prepack for arbitration and insolvency for large accounts, Shukla said it is currently under investigation and will be submitted to the government in the next 2- months.
He further said that prepack is also being considered for larger accounts as they aim for quick resolution.
Prepackaged insolvency involves negotiating and agreeing a resolution PLA between the debtor and its creditors before going into formal bankruptcy.
P Santhosh, managing director of NARCL, the government-backed bad bank, says delay in resolution will deteriorate the asset quality, making revival difficult.“There are many factors contributing to this delay, and coordination with financial lenders is important to avoid it. The concept of preemptive bankruptcy is yet to be adopted. However, many practitioners have discussed that this is one of the tools that can be extended to larger corporate disputes, that initially, there can be a promoter-led resolution plan, which can be fine-tuned over time,” They said.
B Shankar, Deputy Managing Director (Stressed Assets), State Bank of India, highlighted that the success of insolvency resolution depends on cooperation between creditors, distressed companies (often with suspended directors/promoters) and insolvency professionals.
The insolvency professionals participants at the conclave enriched themselves with judicial members of NCLT Kolkata, Rohit Kapoor, Balraj Joshi and Bidisha Banerjee, who shared their inputs for speedy resolution.
The IBBI is expected to submit a report to the government in the next 2 months to include "mediation" in the Insolvency and Bankruptcy Code (IBC), which is currently under discussion and scrutiny.
The regulator is also working on prepackaged insolvency for large corporate cases, which has so far been allowed only in MSME cases.
Sudhakar Shukla, whole-time member, IBBI, while addressing the 7th Insolvency N Bankruptcy Code Conclave organized by CII, said, for the first time in a year, the number of outputs has exceeded the number of inputs, leading to a reduction. Number of pending cases across India.
He said that despite the hurdles, resolution of Rs 3.5 lakh crore was achieved in the last seven years and 27,000 applications worth Rs 10 lakh crore were withdrawn, making IBC a powerful tool for debt resolution in the country.Shukla said the law has evolved with time and the interventions made to reform it have been remarkable.
“In 2023-24, around 12 amendments and 86 interventions have been made in the IBBI within a single year. This shows that we are responding to specific needs to bridge the gaps,” he said.
He further said that like real estate, a regional approach has been adopted to address unique problems for quick solutions.
“We are trying to follow a sandbox approach,” Shukla said.The recent amendments were crazy on real estate where project-wise resolution was done, keeping allotted houses from liquidation was a big step forward in the zonal approach."
Speaking about the demand for prepack for arbitration and insolvency for large accounts, Shukla said it is currently under investigation and will be submitted to the government in the next 2- months.
He further said that prepack is also being considered for larger accounts as they aim for quick resolution.
Prepackaged insolvency involves negotiating and agreeing a resolution PLA between the debtor and its creditors before going into formal bankruptcy.
P Santhosh, managing director of NARCL, the government-backed bad bank, says delay in resolution will deteriorate the asset quality, making revival difficult.“There are many factors contributing to this delay, and coordination with financial lenders is important to avoid it. The concept of preemptive bankruptcy is yet to be adopted. However, many practitioners have discussed that this is one of the tools that can be extended to larger corporate disputes, that initially, there can be a promoter-led resolution plan, which can be fine-tuned over time,” They said.
B Shankar, Deputy Managing Director (Stressed Assets), State Bank of India, highlighted that the success of insolvency resolution depends on cooperation between creditors, distressed companies (often with suspended directors/promoters) and insolvency professionals.
The insolvency professionals participants at the conclave enriched themselves with judicial members of NCLT Kolkata, Rohit Kapoor, Balraj Joshi and Bidisha Banerjee, who shared their inputs for speedy resolution.
