INSUBCONTINENT EXCLUSIVE:
bankruptcy code amendments are credit positive for banks, Moody's Investors Service said on Thursday.The Union cabinet had, on July 18,
effectiveness, and three of the proposals have credit-positive implications for Indian banks," a Moody's statement said."It gives the
committee of creditors explicit authority over the distribution of proceeds in the resolution process, thereby maintaining the accepted
committee of creditors stating that the resolution proceeds should be equally distributed among all claimants, thereby putting secured
creditors on the same level as unsecured and operational creditors."The amendment will be applied with retroactive effect and will
strengthen the case of secured creditors in the Essar Steel resolution," the statement said.The second amendment proposes that cases
referred to the IBC should be resolved within 330 days, including appeals, which is "a credit positive for Indian banks because it will
reduce resolution timelines"."Cases in the IBC have taken much longer to resolve than the originally envisaged 270 days, in large part
because concerned parties have repeatedly appealed to the higher courts," the statement said."However, the poor track record of resolving
cases on time means that actual implementation will be required before the process can be said to have been definitively speeded up," it
creditors can approve the resolution process as long as more than 50 per cent of the homebuyers on the committee give their approval."This
amendment is credit positive for Indian banks because it will facilitate the resolution of real estate projects," said the US ratings
multinational.Under the IBC, homebuyers in a real estate project are treated on par with secured creditors, which means that their approval
numerous, obtaining the approval of all the affected homebuyers has proved a logistical challenge
With the proposed change, only the approval of a majority of those present will be required for the resolution to be approved," the
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