INSUBCONTINENT EXCLUSIVE:
The Reserve Bank of India has called for strengthening the National Company Law Tribunal(NCLT) infrastructure to ensure time bound
resolution of stressed assets of the banking sector
released on Friday, in view of the large number of cases that may be referred to the NCLT in near future, there may be a case for
Bankruptcy Code (IBC) has been witnessing a growing number of applications from creditors which is not only challenging the existing
infrastructure of the NCLT but also seriously impacting the completion of the resolution process within the stipulated timelines, ratings
firm Icra said in a recent note
The number of corporate debtors admitted by the NCLT but are yet to be resolved through the corporate insolvency resolution process
increased to 816 as on September 30, 2018 from 723 as on June 30, 2018, despite the quarter having the highest closure of cases seen so far
at 123, it said.
The RBI has noted that two entities that play pivotal roles in determining the efficacy of resolution processes in the
Indian context, namely, the committee of creditors (CoCs) and the insolvency resolution professionals (IRPs), need to ensure efficient
outcomes while delicately balancing the interests of all stakeholders
Minimising the time taken to resolve cases and the development of a conducive environment that discourages unnecessary delays assume
importance, it said.
But at the same time it has reiterated that there is no alternative to proper credit appraisal and monitoring, internal
controls and risk management, improved disclosures and efficient corporate governance, all of which must be strengthened to improve the
efficiency of the whole process.
In this context, the proposed public credit registry (PCR) will aggregate information about borrowers from
multiple agencies at one place and allow safe access to the data for all important stakeholders in the financial system.This is expected to
improve credit monitoring and bring about credit discipline among debtors
