IBBI draft papers to improve insolvency resolution likely out this month

The pandemic-induced slowdown has caused inordinate delays in the resolution process, which also impacted the potential investors' plan to acquire stressed assets in India

The Insolvency and Bankruptcy Board (IBBI) is working on two discussion papers on improving efficiency of the insolvency process. These are expected to be issued this month, according to a government official.

One suggests entities act as insolvency professionals for better resolution. The other one focuses on liquidation of companies. These draft papers will suggest ways to speed up the resolution process under the Insolvency and Bankruptcy Code (IBC) — which is currently facing low recoveries.

Defending the insolvency process, regulatory sources said that low recoveries are not attributable to the IBC process. Instead, it is the lenders and the banking practices