Paper: GS – III, Subject: Indian Economy, Topic: Banking and Financial intermediaries, Issue: Insolvency Bankruptcy Code (IBC).
Context:
The Insolvency Bankruptcy Code (IBC) was introduced as India’s first comprehensive bankruptcy law in 2016.
Key Takeaways:
- Shift in Control: It shifted control from debtors to creditors, establishing a time-bound resolution mechanism.
- Judicial Efficiency: Aimed to reduce judicial delays and improve creditor recoveries, with a maximum resolution timeline of 330 days before liquidation.
IBC Proceedings:
Key Challenges Affecting IBC, s Effectiveness:
Judicial Delays and Uncertainties:
The IBC is a critical component of India’s credit ecosystem, and its effectiveness is pivotal as the country aspires to become a $5 trillion economy. While it has made significant strides in improving recovery rates and borrower behavior, challenges such as judicial delays and uncertainties remain.
https://www.thehindu.com/business/is-ibc-an-effective-resolution-tool-explained/article69660687.ece
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