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‘IBC raised confidence of all investors in Indian economy’

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New Delhi, Oct 24 (IANS) The Insolvency and Bankruptcy Code (IBC) has not only strengthened the banking system by helping them resolve outstanding debt piled over years but has also come as a big booster of confidence of national and foreign investors in the Indian economy, a senior SBI official said on Saturday.

In his address as the Guest of Honour in the inaugural session of the international conference (online) on “Insolvency Resolution Paradigm: Global Headwinds and Responses”, State Bank of India’s Managing Director, Commercial Clients Groups, Arijit Basu, said that earlier banks only had “loan structuring” option which used to take five to six years.

“Now, the IBC has provided equal opportunity to corporate sector and banks. It has changed the relationship between borrowers and creditors and provided a mechanism of insolvency.

“Unsustainable debt is a symptom of fundamental issues in the ‘business model’ of the concerned company. In case if you don’t have a viable resolution plan, we (banks) have a viable resolution plan under IBC,” he said.

However, Basu expressed satisfaction that the big corporate houses in India have efficiently managed their cash flow during Covid-19.

The event was organised by the Indian Institute of Insolvency Professionals of ICAI (IIIPI).

In his address, Institute of Chartered Accountants of India (ICAI) President Atul Kumar Gupta highlighted the role of CAs being played in IBC ecosystem as insolvency professionals (IPs).

“About 62 per cent of insolvency professionals are CAs. Besides, IBC has opened several new opportunities for CAs in the form of valuer, liquidator, technical experts in the NCLT, the NCLAT, high courts, and also the Supreme Court, and also various kinds of advisory services,” he said.

Gupta also appreciated the initiatives of the Central government in helping businesses to wade through the economic crisis caused by the Covid-19 pandemic.

In the session titled “Perspective on Global Insolvency Regime”, Joint Secretary, Corporate Affairs, Gyaneshwar Kumar Singh said: “IBC has not only served corporates but livelihoods also. As per estimates, the total value of insolvency cases amount to about Rs 5.63 lakh crore. If it had undergone through liquidation, only about 7 per cent of the money would have been recovered. This would have adversely impacted the Indian economy.”

“With IBC in place, there will be no sick companies and sick banks in the future”.

In the same session, Paul Bannister, Head (Policy), Insolvency Service, UK, appreciated the response of India in handling the economic crisis caused by Covid-19.

“These are very difficult times. We already have a world-class insolvency regime but we are developing further against the context of crisis and changing international context including Covid and UK’s exit from the European Union,” he said.



(This story has not been edited by Newsd staff and is auto-generated from a syndicated feed.)
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