India overhauls insolvency framework

Author: | Published: 24 Aug 2017

Recent legislation may have unified India’s insolvency and bankruptcy proceedings, but issues surrounding the threshold for commencing the process could be a problem

There have been a few rumblings in the Indian business world since the introduction of the Insolvency and Bankruptcy Code of 2016. The Code has sought to produce a single forum for the recovery or restructuring of debts – processes that were previously strewn across different laws interpreted by different bodies. It is intended to jumpstart the credit environment in India where there has been an impasse between debt-laden businesses and banks hesitant to lend without security. With prevailing liquidation practices taking years and producing a low recovery rate, the Code could not come at a better time for creditors and has been lauded as a game changer. However, with its low threshold for commencing the insolvency resolution process, the Code has become a battleground for...


 

 

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