How reforms are building momentum for ‘India’s century’

News: The repeal of the three farm laws is seen through different lenses. Some see it as a sign of stepping back from progressive laws, while others see it as something in the interest of farmers. Despite taking back some progressive steps, to reform certain sectors like agriculture, due to lack of political consensus, many… Continue reading How reforms are building momentum for ‘India’s century’

Let’s rework incentive structures to boost IBC recovery

Synopsis: IBC is a landmark reform and its efficiency can be further enhanced by adopting incentive structure. Introduction Despite value erosion at disbursal due to poor credit discipline, the IBC has yielded impressive recoveries so far. However, the Code has also been criticized on several other grounds, many of which are questionable. Why IBC ‘s… Continue reading Let’s rework incentive structures to boost IBC recovery

Criticism of the IBC’s recovery record is unwarranted

Synopsis: The Insolvency and Bankruptcy Code (IBC), which was promoted as a panacea to the problem of bad loans, has been attacked as being ineffective at best and counterproductive at worst. It requires a more nuanced debate. Introduction In recent months, a landmark economic reform of the last decade has come under criticism from various… Continue reading Criticism of the IBC’s recovery record is unwarranted

Another IBC fix? (On a Code of Conduct for CoC)

Synopsis: Regulator’s proposal for code of conduct for the Committee of Creditors (CoC) deserves scrutiny. Introduction The Insolvency and Bankruptcy Board of India (IBBI) has issued a discussion paper on the corporate insolvency resolution process and invited comments on its suggestions. What is the issue? CoC is unregulated, since the members of the CoC are… Continue reading Another IBC fix? (On a Code of Conduct for CoC)

Integrity of insolvency processes: A tough ask

Source: This post is based on the article “Integrity of insolvency processes: A tough ask” published in Live Mint on 2nd September 2021. Syllabus: GS3- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment Relevance:  Role of Insolvency bankruptcy code in maintaining the health of financial institutions. Synopsis: Issues hampering the… Continue reading Integrity of insolvency processes: A tough ask

India remains a very difficult country for dying companies

Source: Live Mint Relevance: Insolvency bankruptcy code and corporate failure Synopsis: The failure of Insolvency bankruptcy code to achieve its intended objectives is dubbed as ‘isomorphic mimicry’ by developmental scholars. What is ‘isomorphic mimicry’? It is the tendency of governments to mimic (copy) other governments’ successes, replicating processes, systems, and even products of the “best… Continue reading India remains a very difficult country for dying companies

HAS IBC DELIVERED ON ITS LOFTY PROMISE?

Source: Live Mint Relevance: IBC process is one of the most important aspects of industrial growth. Synopsis: IBC Process has been a mixed bag of achievements and challenges. This article highlights issues and achievements of, and ways to improve the IBC process. Recently, the chairperson of the standing committee on finance, Jayant Sinha informed parliament… Continue reading HAS IBC DELIVERED ON ITS LOFTY PROMISE?

Bad loans: Prevention is better than cure

Source: Business Standard Relevance: Issues related to banking sector in India Synopsis: In managing the bad loan problem, IBC should be the last resort for banks. Context The Standing Committee of Parliament attached to the Ministry of Finance has taken stock of The Insolvency and Bankruptcy Code and made suggestions for improvement. Different models of… Continue reading Bad loans: Prevention is better than cure

Our bankruptcy code deserves credit for what it has achieved

Source: Live Mint Synopsis: An examination of the IBC’s record on resolving cases of business insolvency reveals greater success than critics acknowledge Background Analysis of IBC’s performance: Added points A good insolvency system cannot be judged by the number of companies being liquidated. Because the purpose of insolvency law is to swiftly liquidate firms that… Continue reading Our bankruptcy code deserves credit for what it has achieved

IBC process needs a re-look – Explained, pointwise

Introduction Many experts are questioning the Insolvency and Bankruptcy Code (IBC) and its effectiveness. Recently, The IBC process for the sale of Videocon to the Vedanta group resulted in a haircut of a whopping 95.85 percent. This means the banks will recover only 4.15 percent of their total admitted claims of Rs 64,838 crore. The… Continue reading IBC process needs a re-look – Explained, pointwise