Insolvency Professionals (IPs) should make every possible effort to improve the insolvency ecosystem in the country, Ravi Mital, Chairperson, Insolvency and Bankruptcy Board of India (IBBI) has said..

This will increase the confidence of prospective bidders in the stressed assets and ensure better resolution of the corporate debtors, Mital said at a conference on “Developing Markets for Stressed Assets in India” organized by Indian Institute of Insolvency Professionals of ICAI (IIIPI).

“IPs should compile delays and litigations and find out ways to minimize them. If delays are reduced, venture capitalists will be encouraged to invest in stressed assets,” Mital said. 

He also suggested that IPs revisit the companies which they had resolved through resolution plans under the IBC, after 4 to 5 years of their resolution. They should prepare “success stories”, which will be useful in creating a positive environment for investment in stressed assets, he added.

Akhil Gupta, Vice Chairman, Bharti Enterprises Ltd, said that it is the right time to extend Prepack Insolvency regime for all the companies. 

Also read: IBBI chief urges banks to file IBC cases early 

“If implemented properly it would be a very significant step for the development of the stressed assets market in India,” he said.

IIIPI Chairman Ashok Haldia highlighted that the ultimate objective of the IBC is to reduce stressed assets and the focus of the IBC 2.0 is to ensure the speedy resolution of CIRP cases. 

He informed that IIIPI has made mandatory Peer Review for a class of IPs and the result of Peer Review will also be made available on IIIPI website in future.

In the seven years since its enactment, the IBC has made some strides in reducing the time required for the resolution of insolvency cases, leading to quicker closure of distressed businesses. 

The overall time taken on an average still continues to be a picture of worry at about 620 days, higher than the legally enacted outer limit of 330 days.

For creditors, the IBC process has been a mixed bag with some witnessing higher recovery rates from stressed assets, enhancing their confidence in the insolvency resolution process.

The code helped banks and financial institutions reduce their Non-Performing Asset (NPA) burden by resolving bad loans.

The IBC has enhanced the ease of doing business in India by providing a structured framework for insolvency proceedings, attracting both domestic and foreign investors.

IBC has also strengthened the rights of creditors and prioritized their interests during insolvency proceedings.

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