IBC delays

It seems that the IBC intended for quick resolution of stressed assets in banking sector is getting diluted due to the lengthy process and frequent court intervention. As the very purpose of the IBC is to get a time-bound resolution of stressed assets, circumstances are forcing delays in resolution. Undue delays in litigations are impacting the efficacy of the IBC process. The Essar Steels case was submitted to the NCLT beyond the 270-day norm which it rejected. So Essar Steels went to court and the case got mired in various courts and appeals. Finally the court requested the NCLT to admit the case which it ought not have ordered as it would give precedent to other companies to proceed alike. The actual data show a bleak picture. Out of 977 cases admitted only 34 cases have seen successful resolution while there are still 716 cases under CIRP even after two years after the inception.

Since the IBC is still evolving and testing waters, there have been challenges at various stages — right from admission, expression of interest from the parties to submission of plans and final approval by the NCLT. If such is the progress of resolution of stressed assets one can imagine the time taken for to finalise the other cases and cases that would come up in future.

It is also to look into the Inter Creditor agreement (ICA) signed among banks which would be a better concept to resolve stressed assets. Avoiding undue delays in the process, and limiting judicial over reach is imperative, if at all the purpose of IBC is to be served successfully.

Bheemavram (AP)

Considering the various factors involved in NPA resolution process, the efficacy of judicial remedy through IBC appears to be uncertain in the near future and it is going to be an endless wait for banks which are counting much on this mechanism for heavy recoveries, notwithstanding the haircuts involved. Earlier banks were adopting one time settlement (OTS) method as an effective recovery tool. However, the fear of surveillance and vigilance haunting the OTS decisions of bankers, this method has been pushed to the backburner in respect of bigger loans and only in case of small loans it is still effective. Promoters of majority defaulting companies too prefer this route as it saves them from total bankruptcy and improve their chances of business revival. Bank recoveries would improve substantially only when a conducive atmosphere and support is provided to the bankers for their hassle-free OTS decisions.

Bengaluru

With reference to the editorial ‘The right move’ (October 17), businesses now, would need to start taking privacy seriously for which a template has been laid.. Penalties and potential enforcement action, will ensure that product managers think about privacy at all stages of product design and implementation. With the DPA, we should hopefully, evolve the jurisprudence on terms as “fair and reasonable” and the scope of “personal data” This increases compliance costs in the short term in the hope that the long-term benefits will follow. Radical measures as these that has manifold stakeholders, must be predicated on transparency and consultation. The Data Security Council of India (DSCI), was completely against it and its dissent, was appended in the Report. A consultative process with multiple stages of feedback would have been preferable. A fine tuning is the need of the hour.

Navi Mumbai

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