IBBI urges for streamlining insolvency process to boost investor confidence

Insolvency process in India: Insolvency professionals are encouraged to enhance the insolvency ecosystem to boost confidence among potential bidders for stressed assets and improve the prospects of successful resolution, said a senior IBBI official at a conference

Ravi Mital, the Chairperson of the Insolvency and Bankruptcy Board of India (IBBI), underlined the need for professionals to compile information on delays and legal disputes, working diligently to minimise them.

The IBBI plays a pivotal role in implementing the Insolvency and Bankruptcy Code (IBC), a framework designed to facilitate the time-bound resolution of stressed assets in a market-driven manner. 

"If delays are reduced, venture capitalists will be encouraged to invest in stressed assets," Mital was quoted as saying in a release issued by IIIPI.

The Indian Institute of Insolvency Professionals of ICAI (IIIPI) organised a conference titled 'Developing Markets for Stressed Assets in India,' providing a platform to discuss strategies and advancements in the management and resolution of stressed assets.

Investing best efforts in enhancing the insolvency ecosystem

Mital urged insolvency professionals to invest their best efforts in enhancing the insolvency ecosystem in the country. This enhancement, he underlined, would instil confidence in potential bidders, leading to improved resolution outcomes for corporate debtors. Confidence in the insolvency process is vital for attracting bids and achieving successful resolutions in a timely manner.

Ashok Haldia, the Chairman of IIIPI, said that the primary objective of the IBC is to reduce stressed assets. He highlighted that IBC 2.0 is designed to expedite the resolution process and address challenges that were identified in the initial implementation. One of the measures implemented by IIIPI is the mandatory peer review for a specific class of insolvency professionals, aiming to enhance the overall quality and effectiveness of insolvency proceedings.

Overall, the efforts to improve the insolvency ecosystem in India are fundamental to attracting investment, fostering confidence among stakeholders, and achieving successful resolutions in the realm of corporate debt. The ongoing refinements and initiatives like IBC 2.0 aim to further streamline the insolvency process, aligning it with the ultimate goal of reducing stressed assets and enhancing economic stability.

(With PTI inputs)