Overview
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Context
The recovery ratio for creditors through the Insolvency and Bankruptcy Code (IBC) has fallen to its lowest level ever. In Q4 of FY22, the amount to be realised from the resolution process was lower than the liquidation value of assets.
Background
Analysis
Achievements of IBC
Issues with IBC
While the IBC’s performance has been relatively better than the other recovery mechanisms, it suffers from similar systemic issues.
Conclusion
The IBC, despite its shortcomings, is an impressive substitute to the earlier insolvency resolution process in India. The new Code has not only streamlined the process, but also provided a time-bound one-stop solution to the parties involved. Systematic issues need to be addressed to reap its full potential.
Q1. Critically analyse the progress made in resolving stressed assets since the enactment of the Insolvency and Bankruptcy Code (IBC). Q2. Despite multiple amendments to streamline IBC, it has failed to achieve its objective. Examine. Also, suggest reforms measure required for its successful implementation. |
Verifying, please be patient.