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Policy and regulations

Banks are happy recovering even half their bad loans than going under the IBC gavel. Here’s why.

  • Sarfaesi, the original bad-loan resolution mechanism, didn’t work because of painful, lengthy processes.
  • The new insolvency law, too, suffers from similar problems, forcing banks to settle cases outside its ambit.
  • The government must live up to its promise of setting up fast-track and commercial courts for expeditious disposal of cases.
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7 Jun 2019 9 Mins Read 0 comment
Vijay Mallya’s Kingfisher House at Ville Parle in Mumbaj was put up for e-auction on March 17, 2016. No bids were received for the 17,000 sq ft property. The new IBC and NCLT process was expected to make insolvency proceedings smoother, but it has been plagued by a huge case pile-up. Getty Images
Vijay Mallya’s Kingfisher House at Ville Parle in Mumbaj was put up for e-auction on March 17, 2016. No bids were received for the 17,000 sq ft property. The new IBC and NCLT process was expected to make insolvency proceedings smoother, but it has been plagued by a huge case pile-up.
Indian financial markets woke up to fresh worries earlier this week after DHFL missed its coupon repaymentson bonds and Fitch downgraded ICICI Bank and Axis Bank. While the DHFL episode once again exposed the vulnerabilities in the debt mutual-fund space, the downgrade, triggered by the weak operating environment that India’s lenders are facing, had a chilling message.
commercial courts for expeditious disposal of cases. The NCLTs were expected to replace DRTs which were plagued by legal delays and piling of cases. In the current form, the debt tribunals are nothing but another layer in the recovery mechanism. As things stand, the IBC seem to be heading the Sarfaesi way. ( Graphics by Abdul Shafiq)
Indian financial markets woke up to fresh worries earlier this week after DHFL missed its coupon repaymentson bonds and Fitch downgraded ICICI Bank and Axis Bank. While the DHFL episode once again exposed the vulnerabilities in the debt mutual-fund space, the downgrade, triggered by the weak operating environment that India’s lenders are facing, had a chilling message. commercial courts for expeditious disposal of cases. The NCLTs were expected to replace DRTs which were plagued by legal delays and piling of cases. In the current form, the debt tribunals are nothing but another layer in the recovery mechanism. As things stand, the IBC seem to be heading the Sarfaesi way. ( Graphics by Abdul Shafiq)

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