IBC framework needs a booster dose; debt resolutions slacken in two years

According to the statistics by the Insolvency and Bankruptcy Board of India, since the provisions of IBC came into force in December 2016, as many as 5,258 insolvency cases have been filed by lenders

The debt resolution of sick companies or ones that have failed to repay their dues has slowed down considerably under the Insolvency and Bankruptcy Code (IBC), 2016, in the past two years after initial euphoria saw several successful acquisitions by top companies, including the Tatas, Reliance, and the world’s largest steelmaker, ArcelorMittal.

The problems, as identified by the parliamentary committee on finance in August last year, include a very high haircut – as much as 95 per cent in some cases for banks - and delay in the resolution process beyond 180 days in 71 per cent of the cases admitted,