IBC improves business climate by allowing easier exit: FM Nirmala Sitharaman

By: |
Published: October 1, 2019 10:28:36 PM

The Insolvency and Bankruptcy Code (IBC) has improved business climate in the country by making it easier for enterprises to exit in case of difficulties, Finance Minister Nirmala Sitharaman said here on Tuesday.

She said IBC has created a set of professionals who help, advise and also show the path through which businesses can exit if situations are adverse

The Insolvency and Bankruptcy Code (IBC) has improved business climate in the country by making it easier for enterprises to exit in case of difficulties, Finance Minister Nirmala Sitharaman said here on Tuesday. “Very constant real time changes were brought in (by IBC). We have reached a stage where we can stand up for international standards in ease of doing business…And ease of doing business is the one which is also going to help us very clearly for people wanting to do business and not fear doing business because you are not going to get into this and not know the way to come out,” she said. She said IBC has created a set of professionals who help, advise and also show the path through which businesses can exit if situations are adverse.

“There is scope for enterprise in this country really wanting to benefit from such facilitating environment. Banks feel very relieved that there is a mechanism now. Today, much before admission, a lot of them are getting resolved,” she said at an event to mark the third anniversary of the Insolvency and Bankruptcy Board of India.

This shows the readiness with which people are wanting to resolve and get out of business situations which are otherwise not welcome, she added.

Speaking at the event, Minister of State for Finance Anurag Singh Thakur said IBC has brought about a paradigm shift in debtor creditor relationship. Delay in resolution in some cases has raised concerns over the resolution process under IBC, he said.

Citing example of 12 cases referred by the RBI for resolution under the IBC, Thakur said although seven cases were approved, five are still pending for more than two years. “We must analyse why five cases are still pending,” he said.

The RBI in June 2017 directed banks to file insolvency proceedings against 12 large accounts which amounted to 25 per cent of the total NPAs at that time.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1JLL says housing sales down 1 per cent in July-September across 7 top cities; Anarock reports 18 per cent fall
2Corporate credit ratio plunges to 3-year low in H1: Crisil report
3Early Diwali for bank employees: Banks to pay one month advance salary to staff this month