In a recent speech, a senior official from the Reserve Bank of India (RBI) highlighted the significant impact of the Insolvency and Bankruptcy Code (IBC) on the resolution of stressed assets. The RBI noted that the IBC has introduced a unified and time-bound resolution process, which has streamlined the insolvency resolution framework in India. The IBC has also established resolution-focused adjudicating authorities such as the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT), as well as the Insolvency and Bankruptcy Board of India (IBBI) to ensure effective regulation of insolvency proceedings and professionals.

The RBI emphasized that the IBC meets the five principal criteria of an efficient resolution regime, including prioritizing going concern status over liquidation, forcing creditors to work together, ensuring a time-bound resolution, providing claw-back of questionable transactions, and protecting majority creditors from minority creditors. The RBI’s endorsement of the IBC underscores its importance in promoting a more efficient and equitable insolvency resolution process in India.

These judgments and observations from the RBI highlight the ongoing evolution of the IBC and its impact on the insolvency resolution landscape in India.