Unsustainable debt symptom of fundamental issues in company’s biz model: SBI executive

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October 24, 2020 9:05 PM

Unsustainable debt is a symptom of fundamental issues in the business model of the company concerned, a senior SBI executive said on Saturday.

IBC, insolvency, bakruptcy code, resolution, creditor, debitorThe “pre-pack” scheme will require amendments to the Insolvency and Bankruptcy Code (IBC) to take effect, and the government may introduce a Bill to this effect as early as the next session of Parliament.

Unsustainable debt is a symptom of fundamental issues in the business model of the company concerned, a senior SBI executive said on Saturday. Arijit Basu, Managing Director of Commercial Clients Groups at State Bank of India (SBI), also said the Insolvency and Bankruptcy Code (IBC) has provided equal opportunity to corporate sector and banks.

He was speaking at a two-day conference, organised by the Indian Institute of Insolvency Professionals of ICAI (IIIPI), that began on Saturday.

“Unsustainable debt is a symptom of fundamental issues in the business model of the concerned company. “In case if you don’t have a viable resolution plan, we (banks) have a viable resolution plan under IBC,” Basu said.

Insolvency and Bankruptcy Board of India (IBBI) Member Mukulita Vijaywargiya said the purpose of the Code is to change the behaviour of the corporate. “We have achieved much on this front despite the shortcomings,” she added.

IIIPI Chairperson Ashok Haldia emphasised on strengthening the IBC to face new challenges.

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