Since its enactment in 2016, the Insolvency and Bankruptcy Code has been the crowning achievement of the NDA governments reform agenda. With the Finance Minister quoting recoveries of close to 3-lakh crore due to the IBC, there is little doubt that the IBC has helped dent the bad loan crisis in the country and has had some positive impact on Indias credit culture.
Key to the IBCs success has been its push towards time-bound management of distress by relying on the commercial wisdom of the creditors and other market players. The IBC relies on the committee of creditors (CoC) to ascertain if a company is viable and if its business should be carried on, within a defined period of time. The CoC must invite resolution plans, and approve of a…
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