Reserve Bank of India Governor Urjit Patel put his signature to a historic order for recovering over Rs 3 lakh crore from the top 12 defaulters, just 10% is in banks
Nirav Modi scam and the ICICI Bank controversy were amongst the top notch cases that the NCLT is dealing with and Government is taking keen interest in resolving these issues.
Reserve Bank of India’s (RBI’s) controversial February 12 circular that bankruptcy proceedings will kick in 180 days.
Liquidation of corporate person is considered to be the last resort in order to recover money. When all the plan of resolution have failed and no other way could be adopted then dissolution of company is done.
The government has made it clear that it doesn’t want any defaulting promoters back until they clear their dues.
According to the terms of loan resolution in the Insolvency and Bankruptcy Code, the first preference on recovery is to secured financial creditors, followed by unsecured financial creditors, and then operational creditors.
Insolvency Code has motivated a lot of lenders to suo moto move the court against their borrowers and recover their bad debts without showing any further leniency.
The recent amendments in the bankruptcy resolution framework will help reduce timelines, enhance transparency and improve realisations.
The IBC is playing a crucial role in helping the banks recover their bad debts and these vacations if avoided can help in resolving the mounting cases and help in ease of doing business.
The IBC has clearly outlined the powers and duties of the resolution professional that he can exercise during the insolvency resolution process