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The Insolvency and Bankruptcy Code (IBC), enacted in 2016, aimed to streamline and expedite the insolvency resolution process in India. While the IBC has undoubtedly brought significant reforms to the insolvency landscape, its implementation has not been without challenges.
BL State of the economy podcast focuses on IBC 2.0 and highlights what areas need the attention of the policymakers. One of the major challenges has been the legal interpretations and precedents. This is besides the primary challenge of the lack of adequate operational infrastructure.
The IBC introduced a comprehensive legal framework for insolvency and bankruptcy proceedings. However, the interpretation of the code’s provisions and the absence of clear precedents have posed challenges. Different interpretations by various stakeholders, including NCLTs, appellate tribunals, and higher courts, have created ambiguity and inconsistency, leading to prolonged litigation and delays in resolving cases.
The successful implementation of the code requires addressing various challenges. Improving operational infrastructure, providing clarity in legal interpretation, streamlining procedures, developing a robust insolvency ecosystem, and enhancing mechanisms for cross-border insolvency are crucial steps in ensuring the effective implementation of the IBC.
Continuous evaluation, stakeholder consultations, and timely amendments are necessary to overcome these challenges and make the IBC a more efficient and responsive framework for insolvency resolution in India. Time has come for IBC 2.0.
Sumit Khanna, Partner & National Head Corporate Finance & Restructuring Services at Deloitte India talks about the next version of the Insolvency and Bankruptcy Code and what is the need of the hour. He leads the IBC practice for Deloitte in India.
Listen to the podcast here
(Host: KR Srivats; Producers: Nabodita Ganguly, Siddharth MC)
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About the State Of The Economy podcast
India’s economy has been hailed as the bright spot amid the general gloom that seems to have enveloped the rest of the world. But several of its sectors still stutter about even while others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.
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