- First International Research Conference on Insolvency and Bankruptcy is being organised by the Insolvency and Bankruptcy Board of India and IIMA
- Interested participants can register through the IBBI and IIMA websites
- Need framework to study impact of insolvency law: Corporate Affairs Secretary
NE EDUCATION BUREAU
AHMEDABAD, APRIL 30
Minister of State for Corporate Affairs Rao Inderjit Singh on Saturday said streamlining the CIRP (Corporate Insolvency Resolution Process) and liquidation process will further help in consolidating the progress made to secure gains to the economy.
He was speaking at the first International Research Conference on Insolvency and Bankruptcy is being organised by the Insolvency and Bankruptcy Board of India (IBBI), jointly with the Indian Institute of Management Ahmedabad (IIMA) on Saturday and Sunday.
In his inaugural address, Rao Inderjit Singh highlighted the successful journey of the Insolvency and Bankruptcy Code, 2016 (Code) by establishing a framework and effective ecosystem for insolvency resolution in the economy. Praising the significant contribution of the Code in reducing the Non-Performing Assets of the banking industry and promoting entrepreneurship in Indian economy, he cited that the Code has assumed larger significance post the COVID- 19 pandemic and has been instrumental in saving both lives and livelihoods.
He also lauded the extraordinary contributions of Judiciary, Government agencies, Regulators, and stakeholders of the IBC ecosystem in facilitating swift and effective implementation of the Code.
According to him, the IBC has opened up unlimited possibilities of resolutions and the proposed cross border insolvency framework will redefine India’s relationship with the rest of the world.
“The framework will address all applications such as seeking recognition of foreign insolvency proceedings and applications from foreign jurisdictions seeking cooperation in Indian jurisdiction,” he noted.
Corporate Affairs Secretary Rajesh Verma pitched for having a framework to study the impact of the legislation.
Emphasising that the government and regulator IBBI have been constantly making course corrections to address any gaps in the Insolvency and Bankruptcy Code (IBC), he also said the law has brought in a cultural shift in the dynamics between lenders and borrowers as well as promoters and creditors.
The IBC, which came into force in 2016 and has undergone six amendments so far, provides for a time-bound and market-linked resolution of stressed assets.
“Some critics have observed that IBC has led to more liquidations than resolutions… There is presently no framework to track the outcome of insolvency and bankruptcy regime…it is crucial to continue to study the impact of the insolvency framework created by IBC and conduct a SWOT analysis to investigate (its) strengths and weaknesses,” Verma said.
He also noted that the World Bank Doing Business indicators that track the outcome of the IBC have been discontinued.
“The government and regulator IBBI have been constantly course correcting in responding to any gap in the Code… While we are working with agility as regards implementing the provisions of the Code… it is important that we have a rigorous and evidence-based research to public policy,” Verma said.
IBBI Chairperson Ravi Mital said a large number of stressed projects are going into liquidation since they come into the IBC process very late.
The Insolvency and Bankruptcy Board of India (IBBI) is a key institution in implementing the IBC.
While noting that regulations are also tilted towards liquidation, he said the regulator will examine the matter.
“In a month or two, we will examine it on how to encourage resolution more than liquidation. The basic essence of IBC is to resolve a project as a going concern,” he added.
Stressed assets should come into the IBC process as early as possible and liquidation should be the last resort, Mital said.
M Rajeshwar Rao, Deputy. Governor, RBI highlighted importance of timely resolution of stressed assets for banking sector. Lauding the paradigm shift brought by the Code, he noted the need of a comprehensive framework to resolve Group Insolvency.
The conference offers a unique opportunity to listen to India’s thought leaders and policy makers in the three panel discussion sessions, planned in parallel with the research presentations. The panel discussion on ‘Banking and Industry – Perspective on IBC’,will be chaired by MB. Gosavi, Member (J), NCLT, Ahmedabad. The panel discussion on ‘Reforms in Insolvency Regime’ will be chaired by Dr. Deepti Mukesh, Member(J), NCLT, Ahmedabad. The discussion on ‘Insolvency and Bankruptcy Resolutions’ will be chaired by Dr TK Vishwanathan, Former Secretary-General, Lok Sabha. These panels bring together the leading luminaries from Government, Industry, Legal practitioners and Academicians to assess and understand the current environment and would help in setting futurecourse for the insolvency regime in India.
