The Standing Committee on Finance has called for a review of the design of the Insolvency and Bankruptcy Code ( IBC ), which was enacted in May 2016. The Parliamentary Panel said in an action taken report titled ‘Implementation of Insolvency and Bankruptcy Code —Pitfalls and Solutions’, tabled in Parliament on Tuesday.
in the report highlighted the inordinate delays in the resolution process resulting in value erosion of stressed assets.
The Panel during their discourse on the Insolvency Bankruptcy Code ( IBC ) process found that the actual recoveries on the ground are roughly between 25 to 30 per cent and some cases take as long as two years for resolution, far beyond the limit envisaged.
It was also suggested that the process of admitting claims also needs to be revisited as huge delays occur at this stage creating a domino effect on the whole resolution process and, most critically degeneration of asset value.
The Parliamentary Panel has further recommended that the Insolvency and Bankruptcy Board of India ( IBBI ) should undertake capacity building exercise of resolution professionals ( RPs ) and insolvency professional entities ( IPEs ) that function as RPs, as they directly aid in swifter resolutions without compromising the value of the assets.
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