The Insolvency and Bankruptcy Board of India (IBBI) celebrated its Eighth Annual Day with an event that featured discussions on the progress of India's insolvency regime and the impact of the Insolvency and Bankruptcy Code (IBC). Esteemed dignitaries, including Chief Justice (Retd.) Shri Ramalingam Sudhakar, Hon’ble President of the National Company Law Tribunal (NCLT), and Mr. Amitabh Kant, India's G20 Sherpa, contributed significantly to the event through speeches and discussions.
Key Highlights
Institution of the Annual Day Lecture Series:
To commemorate the IBBI’s establishment, the Annual Day Lecture Series was introduced. This year, the lecture was delivered by Mr. Amitabh Kant, who acknowledged IBBI’s role in shaping India’s corporate insolvency landscape through the transformative framework provided by the IBC. He highlighted India’s improvement in the World Bank’s Ease of Doing Business Index, which rose significantly from 142nd in 2014 to 63rd in 2016, largely due to IBC reforms.
Keynote Address by Chief Justice (Retd.) Shri Ramalingam Sudhakar:
Chief Justice Sudhakar emphasized the transformative impact of the IBC on India's insolvency resolution processes, praising the Code's ability to strengthen the banking system by making public sector banks more robust and profitable. He mentioned the Hon'ble Finance Minister’s budget speech, underscoring the importance of further strengthening the IBC ecosystem and announcing plans for an integrated technology platform to enhance transparency, consistency, and timely outcomes.
He further noted the President of India’s recognition of the IBC as one of the most significant reforms of the last decade. Chief Justice Sudhakar lauded the IBBI’s regulatory approach, which aligns with national economic objectives, and called for continued innovation, capacity building, and the integration of technology to ensure prompt resolutions.
Annual Day Lecture by Mr. Amitabh Kant:
Mr. Amitabh Kant praised the achievements of the IBC in its short history, referencing Justice Rohinton Fali Nariman's remark that "the defaulter’s paradise is lost." Mr. Kant described the IBC as a "lighthouse of a new era," which promotes credit discipline and has contributed to a remarkable reduction in Non-Performing Assets (NPAs). According to the Reserve Bank of India’s June 2024 report, the Gross NPAs reached a 12-year low of 2.8%, while Net NPAs dropped to 0.6%, underscoring the positive effect of the IBC on India's financial landscape.
Special Address by Dr. V. Anantha Nageswaran, Chief Economic Advisor, Ministry of Finance:
Dr. Nageswaran provided a broader economic perspective by referencing Joseph Schumpeter's theory of creative destruction, which posits that technological innovation can dismantle existing economic structures to foster new growth. He positioned the IBC as a creative force, driving India’s economic progress. He cited a study conducted by IIM Ahmedabad, which demonstrated the financial revitalization of companies post-resolution under the IBC, with market capitalization increasing from ₹2 lakh crore to ₹6 lakh crore, and significant gains in sales, employment expenses, total assets, and capital expenditure (CAPEX).
Achievements of the IBC and IBBI’s Role:
Shri Ravi Mital, Chairperson of IBBI, reflected on the IBC’s progress over the past eight years, during which 1,000 resolutions have been passed by the NCLT, with 45% of them occurring in the last two years. The last fiscal year alone saw 271 cases successfully resolved, highlighting the accelerated pace of resolutions. He emphasized how the IBC has reshaped the NPA narrative by compelling borrowers to prioritize loan repayments, thus aligning with the Government of India’s vision of Viksit Bharat.
Release of IBBI’s Annual Publication:
The eighth annual day also marked the release of IBBI's annual publication, “IBC के आठ वर्ष: शोध एवं विश्लेषण.” This publication highlights the evolving insolvency regime, the roles of key stakeholders, and analyses various issues, including the intersection of taxation and insolvency, the treatment of workmen’s dues, and privacy concerns in data protection. It also delves into digital transformation, particularly how AI and blockchain can streamline insolvency processes. The publication included nine research papers presented at the IIM Ahmedabad Annual Research Workshop on Insolvency and Bankruptcy in March 2024.
Significance of the Annual Day Celebration:
The celebration brought together a wide range of stakeholders from the insolvency ecosystem, including government officials, regulatory bodies, insolvency professionals, business leaders, and academicians. The event, which was live telecast online, underscored the collaborative efforts between the government, regulatory authorities, and stakeholders to further the insolvency regime in India.
Closing Remarks:
The event concluded with a vote of thanks from Shri Sandip Garg, Whole Time Member of IBBI, expressing gratitude to all participants and stakeholders for their contributions to the development of the IBC and the ongoing efforts to foster economic stability and growth through effective insolvency resolutions.
Conclusion:
The Eighth Annual Day of the IBBI was a momentous event that showcased the remarkable achievements of the IBC in transforming India's insolvency landscape. With a focus on technology, innovation, and capacity building, the IBBI continues to play a pivotal role in shaping the country's insolvency regime and driving economic growth. The event underscored the significance of collective efforts and collaboration in maintaining the success of the IBC and achieving the government's vision for a Viksit Bharat.
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