In the bustling financial hub of Mumbai, a significant call for enhanced recovery measures was made by the Chairperson of the Insolvency and Bankruptcy Board of India (IBBI), emphasizing the need to elevate creditor recoveries from the current 32% to a target of at least 40%. Speaking at the International Convention on Insolvency Resolution and Valuation organized by the Institute of Chartered Accountants of India (ICAI) in New Delhi, Ravi Mital underscored the potential economic impact, noting that a mere 10% improvement could yield an additional recovery of approximately Rs 1 trillion.
Highlighting the effectiveness of the Insolvency and Bankruptcy Code (IBC), Mr Mital noted that the framework had facilitated the return of over Rs 3.4 trillion to creditors through structured, market-linked resolutions. He pointed out a significant rise in resolutions under the IBC, from an average of 125 per year to 270 last year, anticipating further growth in the current fiscal year.
Mr Mital emphasized the pivotal role of resolution professionals (RPs), stressing that their primary objective should be to preserve businesses as going concerns throughout the insolvency process. He urged RPs to innovate within the boundaries of transparency, ensuring that every step aligns with regulatory frameworks and fosters stakeholder trust.
In addressing concerns about the recovery process, Mr Mital called for innovative approaches to enhance efficiency and transparency, asserting that genuine innovations would be supported within the legal and regulatory framework. He stressed that the resolution process must prioritize the interests of all stakeholders, avoiding liquidation wherever possible to maximize creditor recovery.
The convention served as a platform for industry professionals to exchange insights and strategies aimed at optimizing the resolution of distressed assets under the IBC. With a commitment to continual improvement, Mital's address underscored India's ongoing efforts to strengthen its insolvency regime, fostering economic stability and investor confidence in the process.
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